By: Lindsay Sisk, Gable Tax Group
There are many different sales and use tax situations to consider when it comes to Medical Device companies. And when it comes to auditors or jurisdictions looking for additional tax revenue, they often search for additional consumer’s use tax. You may be reading this wondering what in the world is consumer’s use tax, I thought we were talking about sales tax here? (Trust me, I get it.) It’s tax owed on purchases that were paid for without sales tax. Just another fun tax law to make your head spin.
Why do companies get to purchase goods without paying sales tax and self-remit consumer’s use tax? The short answer is because they plan on using it at a later time.
However, if not accounted for correctly, or not understanding the law fully, it can generate a large tax bill for your company. Currently, there are various reasons Medical Device companies should be accruing use tax.
Are you sending out samples? Did you pull a piece of equipment out of inventory to demonstrate? Do you manufacture, and have fixtures that don’t qualify for a manufacturing exemption, and need to pay tax on the use of the asset? Do you rent equipment to people in Illinois? The list can feel pretty endless.
All of the situations above will require a calculation of use tax to some degree, and if you don’t know the various laws for each individual jurisdiction, you can end up with a hefty penalty, owing tax you had no idea existed, and possibly ruin your profit margin for unaccounted for expenses.
This is where I put my plug “That’s where we come in!”. But in all honesty, it can be extremely confusing and a burden, and we want to help! Lucky for you, we specialize in Medical Device companies and the various tax implications that can occur. With over 35 years of joint experience, Gable Tax is here to answer any questions you may have. Reach out to us for a free consultation!
Like this post? Follow me!
More Information:
Website: http://gable.tax/
LinkedIn: https://www.linkedin.com/in/lindsaysisk/
Facebook: https://www.facebook.com/GableTax/
Comments