Chemical Storage Tank Eligible for Tax Exemption

A chemical storage tank qualifies for the sales tax manufacturing machinery and equipment exemption if it is used primarily (more than 50 percent of the time) to store the chemical in its liquid state as an integral part of the production process at the plant, the Illinois Department of Revenue advised in a letter ruling (ST-12-0002-PLR).

The exemption does not apply to storage tanks or other equipment used by a distributor or transporter after the production process to store the product. In addition, the concrete foundation used to support the storage tank does not qualify for the exemption.

Materials used to construct the foundation of the storage tank may qualify for the enterprise zone building materials exemption described in Ill. Regs. Section 130.1951(d)(4) if the materials are incorporated into real estate as part of the building project in that enterprise zone.