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Texas Statutes (Last Updated: January 4, 2014) |
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TAX CODE |
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Title 2. STATE TAXATION |
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Subtitle E. SALES, EXCISE, AND USE TAXES |
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Chapter 151. LIMITED SALES, EXCISE, AND USE TAX |
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Subchapter H. EXEMPTIONS |
Sec. 151.3181. DIVERGENT USE OF PROPERTY USED IN MANUFACTURING
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(a) In this section:
(1) "Divergent use" means the use of property in a manner or for a purpose other than the manner or purpose that qualified the sale, lease, rental, use, or other consumption of the property for exemption under Section 151.318.
(2) "Property" means tangible personal property regardless of whether the tangible personal property is permanently affixed to or incorporated into realty after its purchase.
(b) Divergent use of property exempted under Section 151.318 will not result in sales and use tax being due on the property if the divergent use occurs after the fourth anniversary of the date the property is purchased.
(c) Except as provided by Subsection (d), divergent use of property exempted under Section 151.318 that occurs during any month before the fourth anniversary of the date the property is purchased results in sales and use tax being due for that month. The amount of the sales and use tax due for a month is equal to 1/48 of the purchase price of the property multiplied by the percentage of divergent use during that month multiplied by the sales and use tax rate applicable at the time of purchase.
(d) Divergent use of property exempted under Section 151.318 that occurs during a month before the fourth anniversary of the date the property is purchased does not result in sales and use tax being due for that month if the percentage of divergent use during that month does not exceed five percent of the total use of the property that month.
(e) The amount of divergent use during a month is:
(1) the total time the property operates for a divergent use during a month, measured in hours; or
(2) the total output of the property during divergent use during a month, measured in a manner applicable to that property.
(f) The total use of property is:
(1) the total time the property operates during a month, measured in hours; or
(2) the total output of the property during a month, measured in a manner applicable to that property.
(g) The percentage of divergent use for a month is determined by:
(1) dividing the amount of divergent use determined under Subsection (e)(1) by the amount of total use of the property determined under Subsection (f)(1); or
(2) dividing the amount of divergent use determined under Subsection (e)(2) by the amount of total use of the property determined under Subsection (f)(2).
(h) The use of "pharmaceutical biotechnology cleanrooms and equipment," as that term is defined by Section 151.318(q-1), to manufacture, process, or fabricate a pharmaceutical biotechnology product that is not sold is not a divergent use if the use occurs during the certification process by the United States Food and Drug Administration.