May 22, 2014

EPA Considering Changes to Clean Water Act

The Environmental Protection Agency (EPA) is considering rule changes to the Clean Water Act which would expand the definition of “Waters of the United States”. This change could impact anyone doing business in or near a flood plain. Tell us if this issue is important to you by emailing Patrick Pratt at[email protected].

Export Control Rules Changing

On May 20, 2014, Eric Hirschhorn, the Undersecretary of Industry and Security for the Department of Commerce was in Colorado to explain recent export control changes. More than 15,000 items have recently moved from International Traffic in Arms Regulation (ITAR) to the Commerce Control List (CCL) in an effort to streamline the federal government’s export control process. More changes will come this summer. For more information on this issue or to participate in the weekly teleconference, visit www.bis.doc.gov.

The Colorado Manufacturing Initiative’s Perspective: the 2014 Legislative Session

The 2014 legislative session turned out better than many in the manufacturing community had expected. A trio of bills, two of which passed, targeted the state’s advanced industries as defined by the Colorado Office of Economic Development and International Trade: advanced manufacturing, aerospace, bioscience, electronics, energy/natural resources, information technology and infrastructure engineering.

SALT for Manufacturers

Kreg Brown, EKS&H

Though State and Local Tax (SALT) compliance continues to become more complex, and state revenue departments continue to increase their scrutiny of filings, opportunities abound for companies to benefit from a variety of tax incentives. This is definitely true of the manufacturing industry and even more so manufacturing in Colorado. Below are five critical areas your business may benefit from:

1. Testing, Modification, or Inspection. Colorado provides a sales tax exemption for purchases of tangible personal property for testing, modification, or inspection if the ultimate use of the product is outside the state (i.e. exports) and the testing period does not exceed 90 days. (click here for more information on production inspections for exports)
2. Cleanrooms. Machinery used in qualifying cleanrooms used in producing computer components, software, biotechnological products, and pharmaceuticals are often exempt from Colorado sales and use tax.
3. Resale Exclusion. Don’t forget that everything that becomes part of the manufactured product is often exempt from sales and use tax. This extends to packaging, cartons, labels, instruction and safety pamphlets, skids, bags, and pallets, as seen on items such as private label softgels and other new pharmaceutical products.
4. Machinery Exemption. Many states, including Colorado, provide a sales tax exemption for machinery, tools, and equipment used in manufacturing tangible personal property.
5. Research and Development. Many states provide a refund of state sales and use tax paid on tangible personal property used directly and predominantly in biotechnology, clean technology, and medical devices.

Qualifying for some SALT credits may not be easy or straightforward, but the possible benefit is significant. Working with an experienced, manufacturing industry-focused tax professional will ensure your business can leverage all the potential opportunities, and avoid any criteria-based pitfalls.

Kreg Brown, Audit Partner at EKS&H is a sponsor of the Colorado Manufacturing Initiative and a The Colorado Chamber Board Member. He can be reached at: (303) 740-9400 or[email protected].