A sales and use tax exemption equal to one-half of the total tax liability is available to qualified businesses (manufacturing and processing) on purchases of component building materials to be used in the construction or expansion of a building. A sales and use tax exemption equal to one-half of the total tax liability is also available to qualified businesses on purchases of machinery and equipment to be used within the new or expanded building. Other exemptions to sales taxes for manufacturers are as follows:

• No sales tax on purchases of raw materials, processing chemicals, or packaging materials.
• Manufacturers pay 1.5% sales tax on machinery and equipment used directly in manufacturing and port operations, industrial electricity, natural gas, and fuels.
• Manufacturers pay 3.5% contractor's fee for all costs (exceeding $10,000) including in a contractor's construction contract, including the costs of construction labor and the purchases of construction component materials made by the contractor on behalf of the manufacturer.
• New or expanding manufacturers pay a 3% sales tax for purchases of building construction materials and new machinery or equipment not used directly in the manufacturing process, and a 0.75% sales tax on purchases of all machinery and equipment that is used directly in the manufacturing process, provided that the purchases are made directly from a supplier and not through a contractor.