June 17, 2014 - Part of my job at Blackbird Asset Services is making sure that proper tax is collected for each state and that tax forms are completed properly- some call me “the tax guru”. As such, a recent article jumped out at me- “Gov. Scott Highlights Elimination of Machinery and Equipment Sales Tax”.
According to Enterprise Florida the elimination of the manufacturing and equipment sales tax is expected to save more than 18,000 manufacturing companies in the state approximately $141 million annually. You can read the entire article here- http://www.wctv.tv/home/headlines/Gov-Scott-Highlights-Elimination-of-Manufacturing-Machinery--Equipment-Sales-Tax-259152061.html
Due to the economic struggle in recent years some manufacturing and construction companies have struggled to make a profit. With gas prices higher, demand lower, and less force, it can be difficult to make the most of your revenue. Used equipment can save you over 50% of retail price on new equipment. By removing the sales tax of machinery and equipment companies will have more of a competitive advantage over other states and countries. More equipment can be purchased and more jobs can be created. Seems quite simple, doesn’t it?
There are various counties throughout the country that allow tax exemptions for the resale of equipment, but allowing the sale of new equipment to be tax exempt for an entire state is a huge draw. With the cost of some machinery and equipment reaching $1 million, no sales tax is a real savings. It will be interesting to see exactly how this affects the state of Florida revenue, equipment sales, and if other states will soon follow suit.
Hello New York, are you paying attention?