J. MILLARD TAWES, Governor                         143

CHAPTER 104
(House Bill 369)

AN ACT to repeal and re-enact, with amendments, Section 324(f)
of Article 81 of the Annotated Code of Maryland (1965 Replace-
ment Volume), title "Revenue and Taxes," subtitle "Retail Sales
Tax Act"; and to repeal and re-enact, with amendments, Sections
372(d) and 372(e) of said Article 81, subtitle "Maryland Use
Tax," amending the laws concerning the retail sales tax and the
use tax with particular respect to certain tangible personal prop-
erty which is destroyed in manufacturing, processing, assembling
or refining.

Section 1. Be it enacted by the General Assembly of Maryland,
That Section 324(f) of Article 81 of the Annotated Code of Mary-
land (1965 Replacement Volume), title "Revenue and Taxes," sub-
title "Retail Sales Tax Act"; and Section 372(d) and 372(e) of said
Article 81, subtitle "Maryland Use Tax," be and they are hereby
repealed and re-enacted, with amendments, all to read as follows:

324.

(f) "Retail sale" and "sale at retail" shall mean the sale in any
quantity or quantities of any tangible personal property or service
taxable under the terms of this subtitle. Said term shall mean all
sales of tangible personal property to any person for any purpose
other than those in which the purpose of the purchaser is (i) to
resell the property so transferred in the form in which the same is,
or is to be received by him, (ii) to destroy the property so transferred
in the manufacturing, assembling, processing or refining of other
tangible PERSONAL property to be produced for sale, or (iii) to use
or incorporate the property so transferred as a material or part, of
other tangible PERSONAL property to be produced for sale by manu-
facturing, assembling, processing or refining. Tangible personal
property shall be considered to be destroyed in manufacturing, pro-
cessing, assembling or refining if it is changed in nature by reason of
its use in a relatively short period of time, as the nature of coal is
changed by burning, as refractories which come in direct contact with
molten metals are changed by heat and abrasion, as grinding wheels
are reduced to dust, as acids are changed by contamination, and so
forth. Property which is broken or mutilated shall not be considered
to be destroyed. Tangible personal property shall not be considered
to be destroyed in such operations if its value as property is ordi-
narily dissipated through the gradual wear or tear incident to its
use. Machinery and small tools shall not be considered to be de-
stroyed in such operations. The terms "Manufacturing," "assem-
bling," "processing," and "refining" shall not include (A) main-
taining, servicing, or repairing; (B) testing finished products; (C)
research and development; or (D) providing for the comfort or
health of employees. For the purpose of the tax imposed by this
subtitle, the term "sale at retail" shall include but shall not be limited
to the following:

(1) The sale of alcoholic beverages regardless of the place of
consumption; and the sale of any meals, food or drink for human
consumption on the premises where sold. For the purposes of this