skip navigation

Search Help
Navigation Help

Topic Index

Tax Topics

About Tax Map Website
Publication 510


The following sales by the manufacturer are exempt from the manufacturers tax.

Requirements for Exempt Sales(p30)

The following requirements must be met for a sale to be exempt from the manufacturers tax.

Registration requirements.(p31)

The manufacturer, first purchaser, and second purchaser in the case of resales must be registered. See the Form 637 instructions for more information.
Exceptions to registration requirements.(p31)
Registration is not required for:

Certification requirement.(p31)

If the purchaser is required to be registered, the purchaser must give the manufacturer its registration number and certify the exempt purpose for which the article will be used. The information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with the sale.
For a sale to a state or local government, an exemption certificate must be signed by an officer or employee authorized by the state or local government. See Regulations section 48.4221-5(c) for the certificate requirements.
For sales for use as supplies for vessels and aircraft, if the manufacturer and purchaser are not registered, the owner or agent of the vessel must provide an exemption certificate to the manufacturer before or at the time of sale. See Regulations section 48.4221-4(d) for the certificate requirements.

Proof of export requirement.(p31)

Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof of exportation. See Regulations section 48.4221-3(d) for evidence that qualifies as proof of exportation.

Proof of resale for further manufacture requirement.(p31)

Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof that the article has been resold for use in further manufacture. See Regulations section 48.4221-2(c) for evidence that qualifies as proof of resale.

Information to be furnished to purchaser.(p31)

The manufacturer must indicate to the purchaser that the articles normally would be subject to tax and are being sold tax free for an exempt purpose because the purchaser has provided the required certificate.

Credits or Refunds(p31)

The manufacturer may be eligible to obtain a credit or refund of the manufacturers tax for certain uses, sales, exports, and price readjustments. The claim must set forth in detail the facts upon which the claim is based.

Uses, sales, and exports.(p31)

A credit or refund (without interest) of the manufacturers taxes may be allowable if a tax-paid article is, by any person:


If a tax-paid article is exported, the exporter or shipper may claim a credit or refund if the manufacturer waives its right to claim the credit or refund. In the case of a tax-paid article used to make another taxable article, the subsequent manufacturer may claim the credit or refund.

Price readjustments.(p31)

In addition, a credit or refund (without interest) may be allowable for a tax-paid article for which the price is readjusted by reason of return or repossession of the article or a bona fide discount, rebate, or allowance for taxes based on price.

Conditions to allowance.(p31)

To claim a credit or refund in the case of export; supplies for vessels; or sales to a state or local government, nonprofit educational organization, or qualified blood collector organization; the person who paid the tax must certify on the claim that one of the following applies and that the claimant has the required supporting information. The ultimate vendor generally is the seller making the sale that gives rise to the overpayment of tax.
Claim for further manufacture.(p31)
To claim a credit or refund for further manufacture, the claimant must include a statement that contains the following.
For claims by the exporter or shipper, the claim must contain the proof of export and a statement signed by the person that paid the tax waiving the right to claim a credit or refund. The statement must include the amount of tax paid, the date of payment, and the office to which it was paid.
Claim for price readjustment.(p31)
To claim a credit or refund for a price readjustment, the person who paid the tax must include with the claim, a statement that contains the following.