This question arises several times a month: When buying used or new equipment, should sales tax be added? The answer is, "it depends." It depends on the type of machine or equipment and the state in which you are purchasing. Ideally, the purchase of manufacturing machines should be exempt from sales taxes to prevent tax pyramiding. This phenomenon occurs when taxes are applied multiple times throughout the production cycle. For example, you pay sales tax on the machine that makes a widget, which is then sold in stores or to a plant that also has a sales tax on items incorporating that widget. When states tax machinery, they create a system resembling a gross receipts tax, which is considered one of the most economically detrimental forms of taxation. The good news is that most states have wisely chosen to exempt both used and … [Read more...] about Does Your State Tax Manufacturing Machinery?
Industry News
Private Equity in 2020: Time to Sell/Partner For Manufacturers?
Private equity (PE) firms are some of the most likely buyers of manufacturers. Known as “financial buyers” rather than “strategic buyers” – e.g., another industrial firm or peer looking to expand its business – these organizations leverage a combination of their own cash and debt to fund their acquisitions. While private equity got a bad name in the 1980s during the heyday of the “leveraged buyout” or LBO market, today’s firms, especially those investing in manufacturers, look quite different. Granted, while they will still borrow 50% or more of the cost to fund many transactions, usually guaranteed against the cash flow of the business, many have truly become operators in terms of rolling up their sleeves with management to drive growth, creating operating efficiencies (often in procurement and supply chain) and driving the overall … [Read more...] about Private Equity in 2020: Time to Sell/Partner For Manufacturers?
What should Business Owners look for in a Machinery Appraiser?
For any business owner, investing in machinery isn't just about the equipment—it's about understanding its value. A reliable machinery appraiser can provide insights into the current market worth of your equipment, guiding crucial decisions on buying, selling, or leveraging assets. But with numerous appraisers in the market, how do you select the right one for your needs? In this blog post, we'll explore the key factors that business owners should consider when choosing a machinery appraiser. And remember, for both buying and selling industrial equipment, Surplus Record offers a trusted platform that prioritizes accuracy and integrity in all transactions. Dive in with us to ensure you're making the most informed decisions for your business. Look for Appraisers that have the Right Credentials When it comes to … [Read more...] about What should Business Owners look for in a Machinery Appraiser?
Infrastructure: Bipartisan Case for Investment (A Postcard from London)
Greetings from London, dear readers. This week, we find ourselves traversing the UK engineering marvel that is “Crossrail.” Crossrail, a product of over a decade of meticulous planning and development, is a new 72-mile train line that burrows under virtually all of Central London, significantly reducing many journey times. The planning team behind it asserts that this mammoth project brings “an additional 1.5 million people to within 45 minutes of London’s main employment, leisure, and business districts.” Crossrail’s construction is an engineering triumph. It took eight powerful tunnel boring machines nearly three years to carve out 26 miles beneath London. Some sections of Crossrail lie as deep as 450 feet below the surface of London, far deeper than the subway or the “Underground.” Despite the hefty price tag of … [Read more...] about Infrastructure: Bipartisan Case for Investment (A Postcard from London)
Machinery Appraisal 101: What it is and Why it’s Important
When it comes to machinery and equipment, understanding their value is crucial for any business. Machinery appraisal is the process of determining the value of machinery and equipment, and it is an crucial part of business for a business owner as machinery appraisal can impact business valuation. Here's what you need to know about machinery appraisal and why it's important. What is Machinery Appraisal? Machinery Appraisal is the process of determining the value of machinery and equipment. There are three methods that appraisers commonly use to determine the value of equipment: Sales Comparison Method: This method compares the equipment being appraised to similar equipment that has recently been sold. Income Method: This method considers the income generated by the equipment being appraised, including its operational … [Read more...] about Machinery Appraisal 101: What it is and Why it’s Important
