Is there a luxury tax on power tools?

August 13, 2003

From:  Brooke
Date:  Tue, 29 Jul 2003
Subject:  power tool tax

Dear Michael,

My family was going to start their own business until they received a phone call from a "tax man" who wanted to know all the power tools they had because they would have to pay a "luxury tax." Does this sound right? I can't find any information on luxury tax for power tools. Please help. I really appreciate it.




Date:  Fri, 01 Aug 2003

Hello Brooke,

The federal luxury tax has expired and never did apply to power tools. It could be someone is getting sloppy with their terminology or there is a state (not California) luxury tax that applies. The tax that usually applies each year to tools used in a trade or business is the personal property tax. For details, consult with a local tax professional or call your county assessor's office.

Good luck!
Mike Gray

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.

Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links

Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Our Blog

Subscribe to Michael Gray, CPA's
Tax & Business Insight

We respect your email privacy