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Do I have to pay my tax


Do I have to pay my tax | 20 August, 2003

For the first time, I was asked to pay tax on a used machine. The machine comes from a reputable manufacturer and I do not doubt their integrity. I asked my accountant (who has many titles in front of his name) and asked for a tax exempt number and he told me the vendor is not supposed to add tax in the first place. He copied me the page out of Master Sales and Use Tax Guide. I�m not looking for any trouble and I�m getting my tax certificate. But who is right?

Chart Manufacturing and Machinery

Manufacturing and Machinery

Many states exempt machinery used in manufacturing or agriculture, while others tax such sales at a reduced rate. Most states require the machinery to be directly used or consumed in the process. However, states differ in their definition of directly used or consumed. All states currently tax purchases of office equipment.

Most states exempt raw material used in manufacturing At present only Hawaii and Louisiana tax such purchases.

While many states exempt utilities or fuel used in the manufacturing process, some limit what percentage of manufacturing costs can be included as exempt utilities/ fuel.

For purposes of this chart "T� stands for taxable and 'E" stands for exempt; but the designations are general and exceptions unnoted on this chart may exist. States that do not impose a sales and use tax are not included in the chart.

State Manufacturing Utilities Farm Machinery (e.g. fuel) Machinery

Alabama T E T Arizona E T E Arkansas T T E California T T T Colorado E E E Connecticut E E E District of Columbia T E T Florida T E T Georgia E T E Hawaii T T T

Because I live in Georgia, I cut off the list here. I may e-mail the other states upon request.

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Do I have to pay my tax | 21 August, 2003

Tax laws vary from state to state, but we pay no takes on capital equipment.

It could be that since you don't have a tax certificate yet, the seller is just playing it by the book and aiming to stay out of trouble. So, they'll charge you taxes and leave it to you to claw the taxes back from the government.

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Do I have to pay my tax | 22 August, 2003

Hi Dave, I do understand. However, if I read correctly, then the item is to be taxed or exempt and not the buyer.

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