>> Sure they do. BUT... Finished antennas take lot of space, cost money
>> to > produce, and if they are in stock at inventory time the manufacturer
>> has to pay tax on the finished product rather than the stock tubing.
>
> Tax on inventory? The Feds don't tax inventory, only net income. Neither
> does my state (NH). We tax real estate and business profits, but not
But many states do. MI and many others charge personal property tax or the
equivelant on inventory. This can be 30 mills or more. It doesn't sound like
a lot, but inventory can add up in a hurry to take a bite out of profits.
> inventory. Are there states that actually tax inventory? That sounds like
> a
> great way to discourage manufacturing businesses from locating in your
> state. You sure about that, Roger?
Strange you should mention that as it appears to be one of our major
problems and the state is in deep finantial doggie do.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070531/COL06/705310442&imw=Y
Every one complains about the current state of affairs, but their fixes all
appear to be the SOS.
>
Absolutely unless they've changed in the last few years.
There are currently 15 states that still charge an inventory tax (on the
same basis as personal property tax) which I believe is down somewhat over
the past couple of decades. That is the reason you find many of our
businesses trying to reduce inventory at the end of their physical year.
Maine even taxes private airplanes that fly through the state for 5% of
their value (with some limitations) so there are some really screwey tax
laws out there. Pilots of small piston engine planes are told not to file
IFR flight plans through Maine.
http://www.aopa.org/whatsnew/newsitems/2007/070608me.html
Here in Michigan we are still stuck with the automotive industry mentality
and they are a very large voting block that fights anything to do with
improving mileage or pollution standards that affect the industry. That
means we have a lot of gass guzzlers with people out of work that can't
afford to drive them although that should reduce the pollution levels a bit.
> For many manufacturers, having finished inventory in stock is better than
> having raw material in stock. Banks credit lines are typically based on
> 75%-80% of Accounts Receivable and 50% of *finished* inventory. They won't
> accept raw inventory as collateral.
>
Depending on the state of finances there are times when basing a credit line
on Accounts Receiveable could be a very risky proposition. <:-)) While raw
inventory is a solid value, accounts receiveable may be in truth only worth
a tiny fraction of its face value. If a customer goes under it may take
years to see any of that money as their bankers are going to get paid before
you do IF anything is left by the time they get to your accounts
receiveable.
It's been 25 years since I was in business with a tax license, but I
understand things have changed little here.
73
Roger (K8RI)
> 73, Dick WC1M
>
>
>
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