Exempt Items

The following property items are exempt from the Maryland sales and use tax:

• Any tangible personal property used directly and predominantly in a production activity in any stage of operation on the production activity site - from handling raw materials or components to moving finished product;
• Foundations to support other machinery and equipment or an item required to conform to air or water pollution laws and normally considered part of real property;
• Safety equipment used in production activity;
• Quality control machinery and equipment used in a production activity site;
• Equipment and supplies used to remove finished goods on a production activity site;
• Machinery used to produce bituminous concrete; and
• Certain specified equipment used in aluminum production.

"Direct use" in production activity

To meet the "directly" test, the use of the property must be integral and essential to the production activity, occur where the production activity is carried on and occur during the production activity.

"Predominate use" in production activity

The "predominantly" test is met if the property is used more than 50 percent of the time directly in production activities.