SMART TAX USA - State Manufacturing Exemptions

Incentive Programs: Deferrals, Exemptions, and Tax Credits

New and existing manufacturers, research and development firms, and certain high technology companies can benefit from several tax incentives offered by states and various taxing authorities throughout the US State sales and use tax exemptions are available to taxpayers who manufacture, fabricate or process tangible personal property for sale.

Texas sales and use tax exempts tangible personal property that becomes an ingredient or component of an item manufactured for sale, as well as taxable services performed on a manufactured product to make it more marketable.

Most state sales and use tax laws provide specific exemptions for tangible personal property used or consumed in industrial processing or manufacturing. The exemption may include the ingredients and consumable supplies as well as the machinery and equipment, including maintenance and repair parts. Some states exempt engineering, research, quality control, waste removal, packaging, and other ancillary activities. Manufacturers often find it difficult to benefit from the available exemptions because to fully realize the tax savings takes an unusual combination of knowledge of the law and more importantly, knowledge of the manufacturing process.

SMART TAX USA researches into the specific state statute providing for the exemption. Because some state statutes are vague, we also research the appropriate rules, regulations, letter rulings and case law. Much of the knowledge in the industrial processing/manufacturing area is so specific that it may not be published. Therefore we have an ongoing dialogue with the state tax authorities as well as our network of tax and legal professionals who specialize in this area.

LINK: What types of businesses can benefit from Manufacturing Exemptions >

Links to State Taxing Authorities:

Alabama	http://www.ador.state.al.us/
Alaska	http://www.revenue.state.ak.us/
Arizona	http://www.azdor.gov/
Arkansas	http://www.dfa.arkansas.gov/Pages/default.aspx
California	http://www.taxes.ca.gov
Colorado	http://www.colorado.gov/revenue
Connecticut	http://www.ct.gov/drs/site/default.asp
Delaware	http://revenue.delaware.gov
Florida	http://dor.myflorida.com/dor
Georgia	https://etax.dor.ga.gov/
Hawaii	http://www.state.hi.us/tax/tax.html
Idaho	http://tax.idaho.gov/
Illinois	http://www.revenue.state.il.us
Indiana	http://www.state.in.us/dor/index.htm
Iowa	http://www.iowa.gov/tax/index.html
Kansas	http://www.ksrevenue.org
Kentucky	http://revenue.ky.gov/
Louisiana	http://www.rev.state.la.us/
Maine	http://www.state.me.us/revenue
Maryland	http://www.comp.state.md.us/
Massachusetts	http://www.mass.gov
Michigan	http://www.michigan.gov/treasury
Minnesota	http://www.taxes.state.mn.us/
Mississippi	http://www.mstc.state.ms.us
Missouri	http://dor.mo.gov/index.htm
Montana	http://revenue.mt.gov/revenue
Nebraska	http://www.revenue.state.ne.us
Nevada	http://tax.state.nv.us
New Hampshire	http://www.nh.gov/revenue/index.htm
New Jersey	http://www.state.nj.us/treasury/taxation/
New Mexico	http://www.tax.state.nm.us/
New York	http://www.tax.state.ny.us/
North Carolina	http://www.dor.state.nc.us/
North Dakota	http://www.nd.gov/tax/
Ohio	http://tax.ohio.gov/
Oklahoma	http://www.oktax.state.ok.us/
Oregon	http://www.oregon.gov/DOR/index.shtml
Pennsylvania	http://www.revenue.state.pa.us/portal/server.pt/community/revenue_home/10648
Rhode Island	http://www.tax.state.ri.us/
South Carolina	http://www.sctax.org/default.htm
South Dakota	http://www.state.sd.us/drr2/revenue.html
Tennessee	http://www.state.tn.us/revenue
Texas	http://www.cpa.state.tx.us
Utah	http://tax.utah.gov
Vermont	http://www.state.vt.us/tax/index.shtml
Virginia	http://www.tax.virginia.gov
Washington	http://dor.wa.gov/Content/Home/Default.aspx
Washington, D.C.	http://cfo.washingtondc.gov/cfo/site/default.asp
West Virginia	http://www.wvtax.gov/index.html
Wisconsin	http://www.dor.state.wi.us
Wyoming	http://revenue.state.wy.us/
Guam	http://www.govguamdocs.com/revtax/index_revtax.htm
U.S. Virgin Islands	http://www.ojp.usdoj.gov/saa/vi.htm

"More than 5,000 U.S. jurisdictions have changed their sales and use tax legislation in the last decade"

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State Courts are constantly interpreting sales tax laws and regulations

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Many states are coping with large budget deficits

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