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Archive for Sales And Use Tax Manufacturing Exemption

Excited For Thanksgiving? Breaking Down The Sales Tax Implications Of Your Big Turkey Dinner

Excited For Thanksgiving? Breaking Down The Sales Tax Implications Of Your Big Turkey Dinner

As the big day approaches, you may be finalizing your grocery list for your delicious Thanksgiving feast. While many items you purchase for Thanksgiving dinner will be sales tax free, there are a few key things to be aware of. In this blog post, we break down the sales tax implications of your big turkey dinner. Stay informed and have a happy Thanksgiving!

Turkey Dinner Sales Tax Obligations

First, we look at the most essential part of Thanksgiving — the food! Currently, you will only be taxed on groceries in 11 states, and many of these 11 have either reduced or paused that charge as inflation rates soar.

Maybe you decide to bypass the stress of cooking and choose to eat out at a restaurant or order takeout. If you do eat at a restaurant, you will be charged sales tax in most states. Check out this comprehensive guide to see what you may be charged on top of your base meal price. If you would rather eat from the comfort of your home and decide on takeout, this guide lists your state’s sales tax prices for prepared foods consumed at home.

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Update To The California Partial Manufacturing Sales And Use Tax Exemption

Update To The California Partial Manufacturing Sales And Use Tax Exemption

Since 2014, qualified companies have been eligible for a partial exemption from sales tax for purchases of machinery and equipment used in qualified manufacturing and research and development activities. California was late to the table, as most states have long had exemptions for such purchases. The exemption has also been unique in that it has been a partial exemption, and allowable only on the first $200 million of qualified purchases.

Now, Assembly Bill 1951 would expand the exemption to a full exemption (rather than partial). According to the legislative language, “This bill would on and after January 1, 2023, and before January 1, 2028 make this a full exemption for purchases not exceeding $200,000,000. The bill would repeal these provisions on January 1, 2028 and would revert to the above-described partial exemption on that date.”

So, why make these changes now? As the bill points out:

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Beer Brewing And Sales Tax In California

Beer Brewing And Sales Tax In California

Craft brewing is a highly competitive industry – California leads the U.S. with almost a thousand craft beer breweries; New York, Pennsylvania, Colorado, Washington and Michigan have about 400 craft brewers per state – that’s a lot of competition. So, with all that competition, craft brewers need to look for edges to stay in business by increasing profits and reducing operating costs. Craft brewers can minimize their operating costs by reducing their sales and use tax burden, or “beer-den.” In this blog we are going to focus on the state with the most craft beer brewers – like the color of a crisp lager we will direct this blog to the Golden State – California.

Reducing Your Sales and Use Tax “Beer-den”

The business model for all craft brewers includes two departments – sales and production. Beer sales are either at retail or for resale, and the production happens behind the wall in the brewery. Let’s start with sales:

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Tax And Business Climate In Washington D.C.

Monika Miles On sales tax in washington D.C.

We were in the intermountain west last month, but let’s now take a journey to our nation’s capital. Founded after the American Revolution as the seat of government of the newly independent county, Washington D.C. was named after George Washington, the first president of the United States and a founding father of our nation. As the seat of the United States federal government and several international organizations, Washington is an important world political capital. The city, located on the Potomac River, bordering Maryland and Virginia, is one of the most visited cities in the world, with more than 20 million tourists annually.

For statistical purposes, the District of Columbia is treated as a state-equivalent (and a county-equivalent) by the U.S. Census Bureau. Hence, the District has enacted many laws that are similar to other states. As you’ll see below, it has its own income tax and sales tax rules as well.

Business Climate

Tourism is a leading industry in the District. Aside from many historical landmarks and museums, the District also hosts nearly 200 foreign embassies and international organizations such as the World Bank, the International Monetary Fund (IMF), the Organization of American States, the Inter-American Development Bank, and the Pan American Health Organization.
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Mississippi Sales Tax Exemption For Manufacturing

AARON GILES

The Mississippi sales tax exemption for manufacturing enables manufacturers and custom processors to take advantage of a lower tax rate on eligible machinery and equipment as well as a full sales tax exemption on items incorporated into the final manufactured product. The skilled sales tax consultants at Agile Consulting are excited to help Mississippi manufacturers understand and take advantage of these generous exemptions.

Mississippi sales tax exemption for manufacturers
The state of Mississippi defines manufacturing as “activities of an industrial or commercial nature wherein labor or skill is applied, by hand or machinery, to materials belonging to the manufacturer so that a new, different, or more useful article of tangible personal property or substance of trade or commerce or electric power is produced for sale or rental and includes the production or fabrication of special-made or custom-made articles for sale or rental” [Miss. Code Ann. §27-65-11(b)]. Manufacturing also includes recycling that does convert material into more useful product for sale.
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South Carolina And South Dakota Sales And Use Tax

South Carolina Sales And Use Tax

South Carolina State Sales And Use Tax

The state of South Carolina levies a 6% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2.5%. The range of total sales tax rates within the state of South Carolina is between 6% and 8.5%.

Use tax is also collected on the consumption, use or storage of goods in South Carolina if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of South Carolina on or before the 20th day of February.

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Pennsylvania And Rhode Island State Sales And Use Tax

Pennsylvania Sales And Use Tax

The state of Pennsylvania levies a 6% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2%. The range of total sales tax rates within the state of Pennsylvania is between 6% and 8%.

Use tax is also collected on the consumption, use or storage of goods in Pennsylvania if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Pennsylvania on or before the 20th day of February.
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Important Sales Tax Issues Your CFO May Be Missing

Monika Miles And CFOs on Sales And Use tax

In our multi-state tax consulting practice in Silicon Valley, we often see that sales tax is an afterthought in companies’ finance departments. Many companies have net operating losses (NOLs) for income tax purposes, and they often don’t consider the ramifications of sales tax.

Further, many of our clients sell intangible products – like software, SaaS platforms or digitally downloaded information – and those items don’t SEEM to be taxable. Plus, in California most of those items do qualify for sales tax exemptions; but that’s not the case in all states.

As such, with an already long “to do” list, CFOs and corporate controllers may not put sales tax concerns on the front burner. In another blog post, we explained why it’s not a good idea for a company’s corporate controller to take on the burden of sales tax. In some organizations, however, these responsibilities fall to the CFO. This post explains why this likely isn’t the best option, either.

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Florida Sales & Use Tax Exemption For Manufacturing Is Broad

Aaron Giles - Sales And Use Tax In Florida

Florida sales and use tax law offers a great tax exemption for manufacturers.  There are actually several sections of the Statutes and Rules where the relevant Florida sales and use tax exemptions can be found.  When one combines the relevant Florida sales and use tax exemptions for manufacturers, their combination results in one of the broader exemptions for manufacturers in the U.S.

Fla. Admin. Code Ann.  §12A-1.063 provides the basis for a Florida sales and use tax exemption for industrial machinery and equipment purchases. In Florida, industrial machinery and equipment is defined as tangible personal property that has a depreciable life of three years or more and is a component or integral part of the manufacturing process. To qualify the manufacturer must be classified under a manufacturing North American Industry Classification System (“NAICS”) code (e.g. a code beginning with the two digits of 31, 32, or 33). Examples of qualifying machinery and equipment include: forklifts, conveyor belt systems, or machinery or equipment that shapes, cuts or forms the product being manufactured for sale.

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Should Your Business Begin Collecting Out Of State Sales Tax?

William Rogers, Sales And Use Tax Collection

You’ve probably heard about the recent U.S. Supreme Court decision allowing state and local governments to impose sales taxes on more out-of-state online sales. The ruling in South Dakota v. Wayfair, Inc. is welcome news for brick-and-mortar retailers, who felt previous rulings gave an unfair advantage to their online competitors. And state and local governments are pleased to potentially be able to collect more sales tax.

But for businesses with out-of-state online sales that haven’t had to collect sales tax from out-of-state customers in the past, the decision brings many questions and concerns.

What The Requirements Used To Be

Even before Wayfair, a state could require an out-of-state business to collect sales tax from its residents on online sales if the business had a “substantial nexus” — or connection — with the state. The nexus requirement is part of the Commerce Clause of the U.S. Constitution.

Previous Supreme Court rulings had found that a physical presence in a state (such as retail outlets, employees or property) was necessary to establish substantial nexus. As a result, some online retailers have already been collecting tax from out-of-state customers, while others have not had to.

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Determination Of Property’s Taxability For Michigan Sales And Use Tax

In Michigan sales and use tax law determining whether an item of tangible personal property remains tangible personal property or becomes a fixture affixed to real estate can significantly affect the taxability of the item in question. This determination may impact whether the taxpayer is considered a retailer or a contractor.

There are also several exemptions in Michigan sales and use tax law for purchases of tangible personal property that do not apply if the item is instead a fixture. The Michigan sales and use tax exemptions for both the agricultural industry and the industrial processing or manufacturing industry include such language.

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North Carolina Sales And Use Tax Exemptions For Manufacturers Revised Effective July 1, 2018

North Carolina sales and use tax law provides an exemption for sales of mill machinery, machinery parts and manufacturing accessories, however these items are subject to a 1% privilege tax with a maximum tax of $80 per article until June 30, 2018. The 1% privilege tax has been repealed effective June 30, 2018 by Senate Bill 257 from the 2017 Legislative Session.  Beginning July 1, 2018 purchases of qualifying mill machinery, machinery parts and manufacturing accessories will be exempt from both North Carolina sales and use tax as well as the privilege tax. Read more