8 May
1998
8 May
'98
6:31 a.m.
On Fri, 8 May 1998, John Foust wrote:
**** snip ****
Ward Donald Griffiths III <gram(a)cnct.com>
wrote:
California has, or at least had, a business property tax that was levied
on the value of saleable items on, IIRC, the 31st of March. Convair, then
here in San Diego, would regularly fly out to Arizona anything that was
airworthy to escape that tax.
- don
"Inventory" tax means that for as long
as you hold the merchandise,
you will continue to be taxed every bloody year unless you bite the
bullet and throw the stuff away.
In my understanding of accounting, this "tax" doesn't exist. I think
the previous writer doesn't understand why the
bean counters want to
get rid of inventory. There are certainly exceptions that rile
the blood of small- and large-L libertarians, but in my experience
in US small business, you are only taxed once. A B.C. wants to
reduce inventory for other reasons - it's money tied up in junk
that's not selling, not gaining interest, and isn't growing in value.
When it comes time to dumpster it, it becomes a write-off loss and
its original cost is probably taken as a deduction of some kind,
which alone makes it valuable to the bottom line.
So, the original poster's notion is correct - the complications of
taxation tends to make companies dump old stuff. It's like property
tax - it forces people to find a way for the land to generate at
least that much cash, which discourages people from buying land and
simply preserving it as-is.
- John
Jefferson Computer Museum <http://www.threedee.com/jcm>
donm(a)cts.com
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