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Will New Sales-Use Tax Incentives Spur Manufacturing Growth?

author photo of Lauren Stinson

The manufacturing industry is beginning to show signs of a rebound.  As companies steer towards growth in 2014, some states are offering an array of tax incentives to host new or expanding plants. In fact, several states took particularly bold steps in 2013 to remove tax burdens from manufacturers, which led me to create the following list:

Florida:  I recently had the opportunity to meet Florida Governor Rick Scott.  He is aggressively trying to attract new businesses to his state and help Florida manufacturers expand by offering a variety of tax incentives.   Governor Scott finally accomplished his goal of providing Florida manufacturers with a 100% sales tax exemption for the purchase of machinery and equipment used at their Florida plants.  The new exemption goes into effect April 30, 2014.

California:  The California Governor passed legislation that will partially make the purchase of manufacturing and R & D equipment tax exempt, beginning July 1, 2014.

Minnesota:  Beginning August 31, 2014, purchases of machinery & equipment will be exempt at the time of purchase. No more filing refund claims to claim the exemption.

Georgia:  Sales and use tax exemptions for utilities used in manufacturing began phasing in during 2013.  This year, the exemption is increased to a 50% exemption.

Louisiana:  Beginning this year, the state will automatically renew exemption certificates awarded to manufacturers for the purchase of tax-exempt machinery or equipment.

Mississippi:  Starting in July 2014, the sale of utilities and fuel to manufacturers located in Mississippi will be sales tax exempt.

New Mexico:   In 2014, the phased-in exemption continues.  Effective January 1st, 40% of receipts from the sale of consumables used in manufacturing are deductible from gross receipts.  By 2017, 100% of these receipts will be exempt.

Arkansas:  Effective in July 2014, manufacturers can now take advantage of a 1% partial refund of state sales and use tax on equipment that modifies, replaces, or repairs existing manufacturing equipment.

I hope you are one of the many manufacturers that have benefited from these or similar business-friendly tax incentives in 2014.  Happy New Year!

BTW - I welcome your questions and comments pertaining to sales/use tax issues specific to "Manufacturing & Distribution". 

About the Author: Lauren Stinson,CMI, is Principal and National Leader - Sales & Use Tax at Cherry Bekaert LLP; a national CPA and consulting firm ranked as one of the top 25 in the country. Previously, Lauren was Owner and President of Windward Tax, a sales and use tax consulting firm. She has more than 25 years experience working with manufacturers on sales and use tax issues. Lauren is pleased to share her expertise with SalesTaxSupport readers as the Manufacturing contributor in SalesTaxSupport’s Industry blog, as well as the Georgia Sales Tax contributor in the States blog.

Comments or questions may be submitted by using the on-page "Comment" feature, subject to disclaimer at bottom of page. More specific questions or requests may be sent to Lauren directly using the orange "REQUEST" link on Lauren's Firm Profile page.

Other recent “Manufacturing & Distribution” posts by Lauren Stinson, CMI:

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