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Tractor Talk Discussion Forum

Tax exemption on excavator

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RLH

03-09-2006 02:39:58




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I got a letter from indiana dept of revenue with a 700 bill they clame since excavator wasnt used for direct production its not tax exempt I didnt do custom work I cleaned ponds for cows and dug dranage ditches accountant thanks we can beat it has anybody else dealt with this thanks for your help




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RickL

03-10-2006 02:16:46




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 Re: Tax exemption on excavator in reply to RLH, 03-09-2006 02:39:58  
like earlier mention if not classified as ag equipment,not qualifiy simple as that here.



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John (C-IL)

03-09-2006 10:05:43




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 Re: Tax exemption on excavator in reply to RLH, 03-09-2006 02:39:58  
In IL it's the same deal. Farm equipment is exempt from sales tax, construction equipment, even that used on a farm is not exempt from sales tax.



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Mike (WA)

03-09-2006 08:24:49




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 Re: Tax exemption on excavator in reply to RLH, 03-09-2006 02:39:58  
In most states, for goods to be sales tax exempt, they have to be incorporated into the product to be sold- so cattle feed is exempt, but the equipment used to raise the cattle is not. Leather for purses is exempt, but the sewing machine you stitch them up with is not. You're not incorporating your excavator into what you sell (ditches and empty lagoons), so you're more like the sewing machine than the leather in the purse example.

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paul

03-09-2006 08:02:18




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 Re: Tax exemption on excavator in reply to RLH, 03-09-2006 02:39:58  
As long as all your other taxes are right, & you aren't hiding something else, so you dig yourself a hole when they look through - I'd agree with your tax man. You are using it for your production.

--->Paul



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dhermesc

03-09-2006 05:30:03




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 Re: Tax exemption on excavator in reply to RLH, 03-09-2006 02:39:58  
Sales or property tax?



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Tom IN

03-09-2006 06:29:35




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 Re: Tax exemption on excavator in reply to dhermesc, 03-09-2006 05:30:03  
It's got to be sales tax. Indiana has no exemption on property tax.

I would tend to agree with the tax man---or think hard of a better (more creative) way to explain the use of the equipment. Not knowing your operation, I don't know what product the excavator is producing



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dhermesc

03-09-2006 08:57:08




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 Re: Tax exemption on excavator in reply to Tom IN, 03-09-2006 06:29:35  
If its sales tax, you just as well write the check now, your accountant is pulling your leg.



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