Texas Tax Code - TAX § 151.3181. Divergent Use of Property Used in Manufacturing

(a) In this section:

(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:

(f) The total use of property is:

(g) The percentage of divergent use for a month is determined by:

(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.