Michigan Safety Equipment Exempt from Sales and Use Tax
Personal protective equipment (PPE) or safety equipment purchased by an individual engaged in industrial processing activity is considered exempt from Michigan sales and use tax so long as the equipment is used in industrial processing activities. It’s important to note that this now applies to employee purchases and not just the exempt entity. PPE or safety equipment is considered exempt if it falls under the following criteria:
- The equipment is purchased by an individual engaged in an industrial processing activity on behalf of an industrial processor (or if they are the industrial processor themselves)
- The equipment being purchased is used to contribute toward the safety of authorized personnel
- The equipment being purchased is used in industrial processing activities
In the event PPE or safety equipment is used in both exempt and nonexempt activities, the exemption must be adjusted based on the percentage of exempt usage to total usage. This formula must be approved by the Department of Treasury. If you have questions about your PPE or safety equipment in regards to the industrial processing sales and use tax exemption, contact Doeren Mayhew’s dedicated CPAs and advisors today for guidance.