Can a bakery buy proofing cabinets (which provide the heat and humidity that makes bread dough rise) tax-free under the manufacturing exemption?

Plain-English summary

A bakery equipment seller asked whether proofing cabinets -- which provide the uniform heat and humidity that causes bread dough to rise during baking -- could be purchased by its bakery customers tax-free under a manufacturing exemption certificate. The Comptroller's answer: yes, proofing cabinets qualify for the manufacturing exemption when bought by a business in the business of manufacturing bakery goods for sale. They can be purchased tax-free by issuing an exemption certificate, and the exemption covers not just the cabinet itself but all its component parts, accessories, repair parts, and the labor to repair or assemble the qualifying equipment.

What this means for you

Bakeries and bakery equipment sellers

Proofing cabinets are exempt manufacturing equipment for businesses that manufacture bakery goods for sale -- issue or accept an exemption certificate rather than charging/paying sales tax, and the exemption extends to parts, accessories, and repair/assembly labor too, not just the initial purchase.

Common questions

Q: Are proofing cabinets exempt from Texas sales tax for a bakery?
A: Yes, per this letter, when purchased by a business that manufactures bakery goods for sale -- via a manufacturing exemption certificate.

Q: Does the exemption cover repair parts and labor for the cabinet, not just the purchase?
A: Yes, per this letter -- the exemption includes component parts, accessories, repair parts, and repair/assembly labor.

Citations and references

This letter does not cite a specific Tax Code section or rule number in its text -- it applies the Comptroller's general manufacturing exemption policy directly to proofing cabinets.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9911876L

Original ruling text

November 9, 1999

Dear **:

Thank you for your inquiry concerning the taxability of proofing cabinets. You
state that proofing cabinets provide the uniform heat and humidity needed to
cause bread to rise. You ask if the cabinets can be purchased by your
customers tax-free by issuing a manufacturing exemption certificate.

Proofing cabinets qualify for exemption when purchased by persons in the
business of manufacturing bakery goods for sale. The cabinets may be purchased
tax-free by issuing an exemption certificate. This exemption includes all
component parts, accessories, repair parts, and repair and assembly labor for
the qualifying equipment.

This opinion is based on the facts presented. Different though similar facts
could produce a different response.

If you have additional questions or need more information, you may call me at
1-800-531-5441, extension 3-4634. My regular Austin number is 512/463-4634,
and my fax number is 512/475-0900. Written correspondence may be addressed to
Tax Policy Division, Capitol Station, Austin, Tx 78774.

Yours very truly,

Elizabeth Grieder
Tax Policy Division