State here exempts from sales tax utilities consumed directly in processing or manufacturing. The
statute language is about tangible personal property being processed.
Argument I am considering: a laundromat is processing tangible personal property. The customer's
clothing enters soiled and leaves clean, water and gas and electricity are consumed directly in
effecting that change, and the change is the entire service being sold.
Argument against: the customer owns the goods throughout, nothing is being manufactured for sale, and
the department will almost certainly say this is a service and not processing.
I have found rulings in two states going opposite directions on commercial laundries, but those were
industrial linen services with a wholesale customer, which is a stronger fact pattern than a
self-service coin laundry.
Before I put a number in a report I would like to know if anyone has actually filed a refund claim on
this theory for a retail laundromat and what happened. I do not want to build a client's expectations
on a theory that gets denied at the first level and costs them the filing fee.
statute language is about tangible personal property being processed.
Argument I am considering: a laundromat is processing tangible personal property. The customer's
clothing enters soiled and leaves clean, water and gas and electricity are consumed directly in
effecting that change, and the change is the entire service being sold.
Argument against: the customer owns the goods throughout, nothing is being manufactured for sale, and
the department will almost certainly say this is a service and not processing.
I have found rulings in two states going opposite directions on commercial laundries, but those were
industrial linen services with a wholesale customer, which is a stronger fact pattern than a
self-service coin laundry.
Before I put a number in a report I would like to know if anyone has actually filed a refund claim on
this theory for a retail laundromat and what happened. I do not want to build a client's expectations
on a theory that gets denied at the first level and costs them the filing fee.