SENATE, No. 1731

SECTION 1. of chapter 64H of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by inserting after the definition of “gross receipts” the following new definition:-

“Manufacturing facility”, either a building or other facility at a fixed location or a complex comprised of all buildings and fixed structures used by a purchaser and affiliated entities at a single location which is primarily engaged in the manufacture of tangible personal property to be sold in the regular course of business.  For the purposes of this chapter, the manufacture of tangible personal property shall include the conversion or processing of tangible personal property.

SECTION 2.  Section 6 of said chapter 64H, as so appearing, is hereby further amended by striking subsection (s) and inserting in place thereof the following new subsection:-

(s)  Sales of machinery, or replacement parts thereof, used directly and exclusively in one or more of the following:-

(1)        in agricultural production, including the raising of poultry and livestock;

(2)               in commercial fishing;

(3)               in the process of the manufacture of tangible personal property to be sold, including the publishing of a newspaper;

(4)               in the operation of a commercial radio broadcasting or television transmission;

(5)               in the furnishing of power to a manufacturing facility;

(6)               in the furnishing of gas, water, steam or electricity when delivered to consumers through mains, lines or pipes;

(7)               in the production of animals for research, testing or other purposes relating to the promotion or maintenance of the health, safety or well being of human beings or animals;

(8)               in research and development by a manufacturing corporation or research and development corporation within the meaning of sections 38C or 42B of chapter 63.

For purposes of this subsection and subsection (r), the process of manufacturing includes any process at a manufacturing facility that ultimately modifies or affects raw materials or components, commencing with the initial manipulation of raw materials or components and ending when the manufactured product is placed in primary packaging.  Without limitation, the process of manufacturing includes processes necessary to actual manufacture, such as pollution control including the treatment of waste and the operating supplies used therefore, quality control, lighting and worker safety; processes that protect materials or components from contamination during manufacture such as air filtration, and the fabrication of machinery or tools which, in turn, modify or affect raw materials or components in a manufacturing facility.  Without limitation, the process of manufacturing excludes activities primarily characterized as sales, administration, or research and development.  The process of manufacturing further excludes all processes, such as storage, loading, unloading, transportation or inspection of raw materials or components, which take place before the initial manipulation of such materials or components at a manufacturing facility, and all processes, such as storage, loading, unloading, packaging, transportation or inspection of a product, which take place after the product has been placed in its primary packaging or removed from the manufacturing facility.