Sponsored by:
Assemblywoman NANCY F. MUNOZ
District 21 (Morris, Somerset and Union)
Assemblyman GORDON M. JOHNSON
District 37 (Bergen)
Assemblyman ANTHONY M. BUCCO
District 25 (Morris and Somerset)
Co-Sponsored by:
Assemblymen Space and Wirths
SYNOPSIS
Exempts sales of certain materials used in industrial sand casting processes from sales and use tax.
CURRENT VERSION OF TEXT
As introduced.
An Act exempting sales of certain materials used in industrial sand casting processes from the sales and use tax, supplementing P.L.1966, c.30 (C.54:32B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Receipts from sales of sands, binders, washes, and other similar materials used to create a mold or core in an industrial sand casting process, if those sands, binders, washes, and other similar materials are an integral or essential part of the processing operation, are exempt from the tax imposed by the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.).
2. This act shall take effect immediately and apply to receipts received from all sales made on or after the first day of the fourth month next following the date of enactment.
STATEMENT
This bill provides an exemption from the sales and use tax for sales of certain materials used in industrial sand casting processes to provide tax relief to foundries and other metalworking businesses in this State that rely on sands, binders, washes, and other similar materials to create molds and cores in the production of saleable metal castings.
In general, sand casting is a metal casting process in which molten metal is poured into a mold and allowed to solidify into a tangible object, typically called a casting. As part of this process, different types of sands, binders, washes, and other similar materials are used in various proportions to define the cavity inside a mold and to make any cores contained in the mold until the metal returns to a solid state and the materials are separated from the finished casting.
Currently, these sands, binders, washes, and other similar materials used to create a mold or core in an industrial sand casting process are subject to the sales and use tax as tangible personal property. The Division of Taxation in the Department of the Treasury has previously determined that the materials are not eligible for the sale for resale exemption because the materials do not become a component part of the product produced for sale by the purchaser, and are not eligible for any other exemption allowed under current law.
This bill supplements current law to provide a stand-alone exemption for these materials when used in an industrial sand casting process. Under the bill, sales of sands, binders, washes, and other similar materials used to create a mold or core in an industrial sand casting process, if those sands, binders, washes, and other similar materials are an integral or essential part of the processing operation, are exempt from the sales and use tax.
The bill takes effect immediately, but provides for the exemption to apply to receipts received from all sales made on or after the first day of the fourth month next following the date of enactment.