Vermont Wind Tower Bolts Now Taxable
- Sales Tax News
- Jan 4, 2013 | Gail Cole
Anchor bolt rings, the rings used to support the concrete foundations, are now taxable in Vermont. The Vermont Department of Taxes has released a formal ruling "regarding the applicability of Vermont sales tax to sales of anchor bolt rings." The steel anchor bolt rings in question were sold "to be embedded into poured concrete foundations which support wind towers… ."
In Vermont, sales and use tax applies to sales of tangible personal property, and it is undisputed that the anchor bolt rings in question are "personal property which may be seen, weighed, measured, felt, touched…" (32 V.S.A. Section 9771(1)).
The state of Vermont allows an exemption from sales tax for qualified manufacturing and equipment if:
- They are "used in the manufacturing process;"
- The use is "direct and exclusive;" and
- The manufacturing process "produces tangible personal property for sale."
However, the exemption does not apply if the machinery or equipment includes "buildings and structural components thereof."
Once "the rings are embedded into the poured concrete foundations which support the wind towers…, they form an integral part of this real property." They are therefore considered structure component of the tower, rather than machinery or equipment. As a result, they cannot qualify for the machinery and equipment exemption.
Sales tax rules and law changes impact the micro and macro products and services that support key functions throughout the U.S. This is just one (literally) small example of the ways in which sales tax changes necessitate close scrutiny.
Get Free Tax Rate Tables