Ezel / Tax Rulings / CT
CT Ruling 90-49 Sales and Use Taxes 1990-05-17

Could a manufacturer buy clean-room air-purification machinery tax-free when the system was essential to growing gallium arsenide wafers?

Short answer: Yes on the stated facts. DRS ruled that the air-purification machinery was used directly in the production process for growing gallium arsenide wafers. Because the clean room trapped particles and pollutants and was essential to the sensitive process, the manufacturer could buy the machinery tax-free by giving its supplier the specified exemption certificate.

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This page answers the general question as of 1990. Ezel answers yours, under current Connecticut tax law, with citations.

Currency note: this ruling is from 1990
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1990 Connecticut Department of Revenue Services Ruling based on the particular clean-room machinery, wafer-production process, and facts stated and the law then in effect. It does not establish that every clean-room or air-purification system qualifies under current law, and another taxpayer with different equipment or uses should not assume it applies. Connecticut imposes sales and use tax solely at the state level: there are no local or municipal sales taxes. This summary is informational only and is not legal or tax advice. Consult a licensed Connecticut tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page as a PDF) is the authoritative source for any reliance.
View original ruling (PDF)

Plain-English summary

Corporation X was building a plant to "grow" gallium arsenide wafers for laser diodes. The production process was extremely sensitive and required unusually clean and pure conditions. Its clean room therefore included air-purification machinery that trapped airborne particles and pollutants and protected the wafer-growing process.

DRS ruled that the machinery was used directly in manufacturing. Because the clean room was essential to the production process, Corporation X could purchase the air-purification machinery tax-free by giving the supplier a certificate of exemption for machinery, materials, tools, and fuel.

What this means for you

The ruling treated environmental-control machinery as direct-production equipment because the stated manufacturing process could not achieve the required cleanliness without it. The result was tied to the system's essential role in growing the wafers, not merely to improving the general plant environment.

Common questions

What did the manufacturer produce? Gallium arsenide wafers used in a laser-diode business. A two-inch wafer could potentially yield 1,500 finished diodes.

Why did the air system qualify? It trapped airborne particles and pollutants, and the ruling says the clean room was essential to the extremely sensitive wafer-growing process.

How could the company claim the exemption? The ruling instructed it to issue the supplier a certificate of exemption for purchases of machinery, materials, tools, and fuel.

Citations and references

The published ruling does not cite a statute or regulation number. It grounds the result in its finding that the air-purification machinery was used directly in the manufacturing production process.

Source

Original ruling text

Ruling 90-49, Manufacturing

Ruling 90-49

Manufacturing

You have inquired as to whether the clean room air purification system machinery purchased by your client (Corporation X) is exempt from the sales and use tax.

FACTS:

Corporation X is constructing a manufacturing plant for the "growing" of gallium arsenide wafers to be used in a laser diode line of business. A two inch diameter wafer can potentially yield 1,500 finished diodes. The "growing" of wafers involves an extremely sensitive production process which requires a very high level of cleanliness and purity of materials.

A clean room is required to achieve and maintain the cleanliness required for the "growing" of the wafers. This clean room will include an air purification system designed to trap airborne particles and pollutants in order to protect the "growing" of the wafers. The clean room is essential in this manufacturing process.

RULING:

Based on the facts recited herein, the air purification machinery is used directly in the manufacturing production process of "growing" gallium arsenide wafers. Corporation X may purchase the air purification machinery tax exempt by issuing its supplier a certificate of exemption for purchases of machinery, materials, tools and fuel.

LEGAL DIVISION

May 17, 1990

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