If you change the primary use of an item
If you buy an item exempt to use in a lumber manufacturing activity, it becomes taxable if you stop using it in a lumber manufacturing activity. You must then pay tax on the fair market value of the item.
Example
You buy a forklift that you’ll use strictly to move unfinished wood from one manufacturing line to another during the sawmilling process. The forklift qualifies for the exemption because it’s used directly and primarily in a necessary activity. After one year, you replace the forklift with a new model, and use the old forklift in the shipping area. Shipping isn’t an exempt activity, so the forklift is now taxable on its fair market value. You must determine the fair market value of the forklift, and pay use tax on that amount. All parts and supplies to repair and maintain the forklift from that point on are also taxable.
Note: The opposite isn’t true. If you pay tax on an item because you use it in a non-lumber manufacturing activity, you can’t claim a tax credit if you begin to use it in a lumber manufacturing activity.