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We are a manufacturer and deal in agricultural, fuel and retail products. Agriculture and fuel items are exempt from sales tax, but does that extend to transportation equipment?

Full Question: We are a manufacturing business dealing in both agricultural, fuel and retail products. Sales of agricultural and fuel products are exempt from sales tax, but does that exemption extend to the transportation equipment (tractor trailers and trailers) used to deliver there products to the buyer: i.e. purchases and/or leases of a trailer used for the delivery of the exempt product?

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Answer:

Diane Yetter photoIn Maryland, sales of transportation equipment are generally subject to tax. The exemption for sales of agricultural and fuel products does not extend to the purchase of transportation equipment used to deliver the exempt products to purchasers. If you deliver to purchasers in other states, note that the sale of an aircraft, motor vehicle, railroad rolling stock, or vessel that is used principally to cross state lines in interstate or foreign commerce is not subject to tax.

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