Manufacturers are generally subject to state taxes on their income, sales, purchases, and property. It is important to remember that manufacturers receive many favorable state tax exemptions, credits, special apportionment rules, and other incentives for beginning, expanding, or continuing manufacturing operations in a particular state
There are many incentives for manufacturers to begin or expand their manufacturing operations. In many cases these incentives are focused on a specific manufacturer or a specific type of manufacturer. Often these requirements have very detailed requirements and a sunset date.
States generally tax the income that businesses earn in their states. Although the treatment of income earned by manufacturers varies from state-to-state, manufactures may be able to apply deductions or credits. Manufacturers may also be subject to special apportionment formulas in certain states. New York even has a special tax rate for in-state manufacturers.
How SALT Partners can help: We can help you maximize your state and local tax benefits for manufacturing through our income tax review process. Where available, we can perform a contingent fee income tax return review to identify potential state income tax refunds.
Sales and use taxes
Sales by manufacturers are generally exempt from sales and use tax under the resale exemption unless the sale is made directly to a consumer who does not intend to resell the product. Manufacturing machinery and equipment and utilities or fuel used in manufacturing may be taxable depending on the state. There are many capital equipment and industrial production exemptions among the states.
How SALT Partners can help: We can help you maximize your state and local tax benefits for manufacturing through our sales and use tax return review process . Where available, we can perform a contingent fee income tax return review to identify potential state income tax refunds. At SALT Partners our sales tax return reviews are more in-depth and have lower contingent fee percentages than then those preformed by larger public accounting firms. Your benefit is larger refunds at lower cost to you. Our contingent fee percentages are typically 15% to 30% less than the large public accounting firms.