Setting Up Your Machine Shop: Tax Exemptions and Electricity
Sales tax and powering a CNC machine. Ken shares what he’s learned with these two topics, some of which no one tells you when you’re starting a machining business. Hopefully his experience and learnings should help make your process.
In this video you’ll learn about:
Local government tax programs
Limited Liability Company and why Ken chose this route.
Electricity to power your CNC machine.
What topics do you want Ken to hit in his next video?
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Good Video! Note on Sales Tax: No tax for items you purchase for resale. (steel, paint, hardware used on product, etc)
End user pays the tax. “Used in Manufacturing” may be a “grey” area but I use this to not pay tax on anything used “directly” in manufacturing. (drill bits, end mills, machines, etc) All other items are taxable. Have never been audited by the State of Ohio on what I do and don’t pay tax on.
Same for the other direction, in which you sell a product and charge tax on it and collect taxes for the State. Be careful here as the State wants their tax income. MUST have a Tax Exemption Certificate for everyone you sell to that does not pay taxes!!!