SM Engineering loves saving businesses money, whether we help you find savings on your utility bills or help you understand legal rulings in your state that could save you money come tax time. Here’s a look at two Indiana industrial tax exemption cases that may affect the sales and use taxes your company pays.
In Indiana, manufacturers can be exempt from paying sales and use taxes on equipment and materials they use in the direct manufacturing of their products, including the production of equipment and materials needed for that process.
Two Industrial Tax Exemption Cases
RBC is a company that remanufactures roller bearings. Often, old bearings can be cleaned, polished, and reground so they work smoothly. Other times, old bearing are beyond repair. In these instances, RBC scraps the old bearings and manufactures new ones for its clients. RBC challenged a ruling from the state’s Department of Revenue that the company could not claim the industrial equipment and consumption exemptions for costs related to its remanufacturing business.
MAER is an air conditioning company that supplies cooling to Indianapolis buildings. To do so, it cools and chemically treats water at a central facility. The water is then pumped through pipes to MAER’s clients. MAER challenged the Indiana Department of Revenue’s ruling that the company could not claim exemptions for the equipment and materials it uses to chill and treat water at its central facility.
Two Favorable Rulings
Both RBC and MAER were able to successfully challenge the rulings against them. In RBC’s case, its remanufacturing equipment and materials fit the definition of personal property the state uses to determine equipment and consumption tax exemptions. This meant the company could claim sales and use tax exemptions. Similarly, the court ruled that MAER could exempt the equipment and materials the company used to treat and chill the water that cooled its clients’ buildings from its sales and use tax bills.
Industrial tax law is complicated, which is why it’s important to hire experienced accountants and attorneys to help you identify potential tax savings. To save money on your utility bill, contact SM Engineering for a no-obligation utility bill audit today.