When am I entitled to an exemption for machinery used in manufacturing?

A manufacturing, machinery, and equipment exemption is available for machinery and equipment used primarily (over 50% of the time) in the manufacturing and/or assembling of items for wholesale or retail sale or lease. Effective July 1, 2019, the manufacturing machinery and equipment exemption includes production related tangible personal property.

  • The term "manufacturing" is defined as the production of any article of tangible personal property, whether the article is a finished product or is an article for use in the process of manufacturing or assembling a different article of tangible personal property, by procedures commonly regarded as manufacturing. The manufacturing process must change some existing material or materials into a material with a different use, form, or name, and the changes must result from the process in question and be substantial and significant.
  • The term "machinery" means major mechanical machines or major components of those machines that contribute to a manufacturing or assembling process.
  • The term "equipment" includes any independent device or tool that is separate from any machinery but is essential to an integrated manufacturing or assembling process.
  • This exemption also covers repair and replacement parts as long as the parts are incorporated into machinery and equipment that is exempt under the regulation.

See  Illinois Administrative Code, Title 86, 130.330 for more information.

If you have additional inquiries, you may submit them to the Questions, Comments, or Request form.