USA Sales Tax - Manufacturer

[brookkrajcirik]

Hi All,

We recently paid a contractor to move a machine that produces custom sheets of metal, which we then sell.

We owe the sales tax on that, correct?

This might be a dumb questions, I just want to confirm.

Thanks.

 

[Drmdcpa]

No sales tax is generally not due on services. Moving a machine you already own is a service. If there were tangible assets that you acquired as a result of the move, then you might have a sales tax issue. But only if those tangible assets were significant and not incidental to the service provided.

The above discussion is general sales tax rules. If the contractor had to construct something, then you more than likely acquired significant tangible property and the service to move the machine may have been incidental.

Also sales tax laws vary greatly from state to state, county to county, and city to city. Thus you have to confirm with your local laws as to whether it is taxable. But in general service is not sales taxable.