Sales Tax

[dwdrummer959]

Hi,
I was wondering if any one is familiar with some "law" that allows you to avoid paying sales tax on a computer if it will be used for graphic design. I originally found out about it on a mac related website, however, I can't remember which one. If you have any idea as to what I'm talking about, any information would be greatly appreciated.

Thanks,
//Scott

 

[jsw]

The only even vaguely related thing I know if is that the tax laws allow deductions/depreciation for equipment used for business purposes.

I've never heard of a no-tax-on-graphics-systems law, nor does it sound plausible to me.

 

[w_parietti22]

Do you know anybody in Oregan?

I'm going down there to buy my next Mac.

 

[jsw]

I'm lucky that sales-tax-free New Hampshire is ten minutes away....

 

[dwdrummer959]

Actually, my boss just told me Montana is sales-tax free, and he just happens to live there. With the EDU discount and no tax, you're essentially getting the ADC price with tax. QUAD, here I come!

Thanks again,
//Scott

 

[CanadaRAM]

The sales tax law will vary from state to state (or province) so you have to check with your own legislation.

In BC, the law covers "Machinery or equipment that will be used in production of, or wrought into, taxable goods for sale". So if you buy ink to go into a print job, it is tax exempt ("wrought into"), as is the printing press itself ("production of"). There have been rulings where the computer used to create the plates for the printing press is considered production equipment.

But if the thing that is being produced (for a design studio, it would be the design itself, not the end product) is NOT a tangible object subject to sales tax, then the equipment cannot be exempt.

Machines used 51%+ in software development qualify, as well as a range of machinery in natural resource industries -- but there are many industry-specific exceptions and qualifications.

http://www.rev.gov.bc.ca/ctb/PM&E.htm

 

[dwdrummer959]

CanadaRAM,
Thanks! "Tax Exemption for Machinery" was what I needed to search for but couldn't remember. FYI, I searched for the policies here in Illinois (http://tax.illinois.gov/) and there is such a "law." I didn't read through all of it, so I may or may not qualify, but FWIW there is such an exemption.

Anyone else in Illinois might want to take a look:
http://www.revenue.state.il.us/Publications/Pubs/PUB-104.PDF
and
http://www.revenue.state.il.us/legalinformation/regs/part130/130-325.pdf

Like I said, I didn't read all the fine print so I may be wrong. Feel free to correct me. (I will get around to reading it all.)

Thanks,
//Scott