Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2014
Sales and Use Tax Annotations
440.0000 PROPERTY USED IN MANUFACTURING—Regulation 1525
(a) MANUFACTURING AIDS
(1) In General
440.0047 Government Royalty Crude. An oil processor acquires crude oil from the United States. The crude is not available at a facility where it is feasible to transport it to the processing plant. The firm exchanges the crude oil for crude from another processor. Subsequently, it burns some of the fuel oil which it produces from the exchanged crude.
The use of the crude oil by the processor is subject to tax. The fact that it initially acquired crude from the United States is immaterial. The oil consumed was that acquired under an exchange agreement with another processor. Thus, the oil consumed was purchased from the processor and not the United States. 1/22/90.