103 KAR 8:140. Ad valorem taxation of

machinery actually used in the manufacturing of crushed stone, sand, and gravel.

 

      RELATES TO: KRS 132.020, 132.200

      STATUTORY AUTHORITY: KRS 131.130(1)

      NECESSITY, FUNCTION AND

CONFORMITY: KRS 131.130(1) authorizes the Department of Revenue to promulgate

administrative regulations necessary for the administration and enforcement of

all tax laws in Kentucky KRS 132.020(1)(i) establishes the ad valorem tax rate

based on the value of all machinery actually engaged in manufacturing. KRS

132.200(4) provides that machinery actually engaged in manufacturing shall be

subject to taxation for state purposes only. This administrative regulation

explains the property tax classification found in KRS 132.020(1) and 132.200(4)

for "machinery actually engaged in manufacturing" as it pertains to

the crushed stone, sand, and gravel industries.

 

      Section 1. Machinery Actually Engaged In

Manufacturing. For purposes of this administrative regulation, KRS 132.020(1)

and 132.200(4), "machinery actually engaged in manufacturing"

includes the following:

      (1) Machinery actually used in the

conveying, crushing, screening, washing, drying, blending, and stockpiling of

stone, sand, or gravel to a product of the appropriate gradation and specification

required for sale or final use;

      (2) Machinery and equipment actually used

to size, crush, screen, blend, de-dust or wash the stone, sand, or gravel,

including all necessary housing, electrical, and support systems;

      (3) Machinery and equipment actually used

to convey or maintain proper material flow of the stone, sand, or gravel to and

between the crushing, sizing, screening, blending, dedusting, and washing

facilities; or

      (4) Machinery and equipment actually used

to reassemble, remix, and blend the crushed stone, sand, or gravel into

different product grades.

 

      Section 2. Manufacturing of Crushed Stone,

Sand, or Gravel. (1) Manufacturing of crushed stone, sand, and gravel shall

commence with the initial sizing of the stone (shot rock), sand, or gravel after

it has been removed from its natural deposit, and shall continue with the

loading, hauling, pumping, or conveying to the primary crusher or screen.

      (2) Manufacturing shall continue with the

further sizing, classifying, crushing, screening, blending, dedusting, and washing

of the stone, sand, or gravel.

      (3) Manufacturing of stone, sand, or

gravel shall end when the product meets and maintains the appropriate

gradation, specifications, or blends.

      (4) The loading of stone, sand, or gravel

for final transport to the end user shall only be classified as manufacturing

if blending occurs during the loading process. (34 Ky.R. 374; Am. 967; eff.

12-7-2007.)