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January 21, 2019

Only 8 States Tax Manufacturing Equipment—Is Yours One Of Them?

According to the nonpartisan, nonprofit Tax Foundation, while most states exempt manufacturing machinery from their sales tax, Alabama, Hawaii, Kentucky, Mississippi, Nevada, New Mexico, North Dakota, South Dakota, and the District of Columbia do not.

This tax can lead to reduced business investment and fewer jobs. In a new report, the Tax Foundation says manufacturing equipment should be exempt from sales taxes. Policy Adviser Katherine Loughead advises, “Eliminating taxes on manufacturing machinery and other business inputs is one way states can make strides in becoming more attractive for business investment, while making progress toward a more properly-functioning consumption tax.”

Click here to read the full report, which also lists other sales taxes that impeded business investment.