 Overpaying Taxes is
Against the Law –
Don’t be a Criminal,
Get a Refund!
Washington State’s Manufacturer’s Machinery & Equipment Sales / Use Tax Exemption is a significant incentive and familiar “friend” to most manufacturers. This exemption applies to purchases of machinery and equipment that are used directly in the manufacturing process.
But how well do you really know this tax exemption? We find that many companies eligible for this exemption and other tax incentives either inadvertently do not claim them to the fullest extent or miss them entirely.
Many manufacturers believe they are exempting most of their machinery and equipment from taxation. Yet we frequently find in our review of their purchases significant amounts of overpaid sales or use tax on the peripheral, but related items that qualify for the exemption. Tax law allows refunds for overpayments and missed deductions going back four years. When these overpayments accumulate over several years, the total refund can be significant.
Case study: A metal manufacturer was claiming the exemption and was audited by the Department of Revenue. The DOR reported that the company was paying its taxes “just about right.” After a review of their purchases, the manufacturer received a refund of hundreds of thousands of dollars. Are you eligible? Are you underutilizing? Are you missing deductions? Overpaying? Let’s determine if there might be a refund opportunity for your company.
Call for a free phone consultation:
Darcy Kooiker, CPA
Director of State and Local Tax Services
dkooiker@bpcpa.com |
 Cash In On
Your Inventory –
Managing Your Most
Important Investment
Inventory is the most important asset for manufacturers and distributors because it is the key component in maintaining customer satisfaction as well as your company’s bottom line. If inventory levels are inaccurate, customers will buy elsewhere if you don’t have stock that you thought you had, or your business will incur additional costs to carry extra stock on hand. There is a happy balance that can be reached.
The “annual” physical inventory count is crucial to inventory accuracy. However, if you measure inventory just once per year, how truly accurate is your inventory? To better understand the importance of inventory accuracy, think of inventory as cash. Would you be more diligent about measuring your inventory if the dollar amount of inventory on your balance sheet was literally cash sitting in the warehouse? Most people know exactly how much cash is in their checking account – shouldn’t inventory be viewed the same way? Inventory accuracy will improve substantially by implementing a cycle counting system. Once the groundwork is completed, a cycle counting system is easy to follow, maintain and analyze. Reliable and accurate inventory levels allow for more thorough analysis and better decision-making by management. This is because there is a better picture of what is available for the manufacturing process, or to sell to a custome as well as to forecast future purchasing needs.
Change your mindset. Focus on inventory as cash and strive for accuracy – your customer service level and bottom line will improve.
For more inventory management solutions contact:
Jennifer Raybon, CPA, Senior Manager
Manufacturing & Distribution Services Leader
jraybon@bpcpa.com |
