SalesAndUseTax.com

SalesAndUseTax.com: Atlanta, GA October 1, 2008. 

Florida, Georgia and Tennessee have broad sales and use tax exemptions available for manufacturers.  Aaron C. Giles, President of the sales tax consulting firm SalesAndUseTax.com said “While these exemptions offer generous incentives for qualifying businesses, very few companies take full advantage of them.”  Manufacturers frequently miss out on these opportunities because some states exemptions are not well publicized.  In other cases, manufacturers may only be taking advantage of part of the exemption. 

The Georgia sales and use tax exemption for manufacturers is well documented and relatively easy for taxpayers to find.  The state’s exemption certificate can be downloaded from the Department of Revenue website.  “However, taxpayers do not have access to the case law and letter rulings where the state has set the precedent for exempt purchases,” said Giles.  “The only way for a business to know how aggressively they can interpret the exemption is to have an experienced consultant help them prepare the refund request and identify areas of opportunity.”

Unlike Georgia, the Florida sales and use tax exemption for manufacturers is not well publicized.  While the state of Florida has a broad sales and use tax exemption for these companies, many do not take advantage of it because they are unaware of its existence.  Giles said, “Florida’s manufacturing exemption is buried in the statutes.  Even worse, the language used to describe the exemption is vague.”  The state of Florida does publish Technical Assistance Advisories (TAA) on the Department of Revenue’s website, but navigating them or scanning court cases is time consuming and cumbersome.  Also, the exemptions and rulings described in each TAA apply only to the specific circumstances or industry for which the TAA was written.  “Trying to apply those decisions unilaterally across all industries will lead to denied refund claims,” Giles said.

The Tennessee sales and use tax exemption for manufacturers is not well publicized either.  “The exemption described in Tennessee Rule 1320-5-1-.106 does not describe the types of industrial machinery that qualify for the exemption,” according to Giles.  The Rule also states that taxpayers must apply for the refund prior to purchasing any equipment.  “There are circumstances other than those described in the Rule where the exemption can be applied retroactively after equipment has been purchased,” said Giles.

“In all of these states, we see firms that are underestimating the breadth of the exemption,” Giles said.  “In any state, there is an art to arguing the sales and use tax refund claim.  Few, if any, businesses have the time, resources, experience or expertise to sufficiently pursue these refund opportunities on their own.”   Giles advocates bringing in an outside consultant to handle the discovery and processing of the refund claim.  “Businesses should look for consultants who are willing to work on a contingency-basis,” said Giles.  ”This ensures the consultant will put forth his or her best effort to resolving the refund quickly.”  Contingency-based contracts also protect the company from the possibility of the racking up substantial consulting bills for efforts that produce little to no savings.

# # #

SalesAndUseTax.com manufacturing press release

Florida sales and use tax

Georgia sales and use tax

Tennessee sales and use tax

Tennessee industrial machinery sales and use tax exemption  

Copyright © 2008 SalesAndUseTax.com.  All rights reserved