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Ask Dr. Fiona Chen Your Own Question
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 355
Experience:  Former IRS Revenue Agent
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I am looking to include 3d Printing service as part of my

Customer Question

I am looking to include 3d Printing service as part of my business in Chicago, IL
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I am trying to determine what kind of tax for the 3d print processing I will need to collect and how to submit to the state Besides that, I am doing digital design so I do not believe that is taxable in IL if I am correct
JA: Is there anything else the Accountant should be aware of?
Customer: Those are the main things
Submitted: 3 months ago.
Category: Tax
Expert:  Dr. Fiona Chen replied 3 months ago.

Dear Customer,

When we are doing 3d printing, it could be considered as manufacturing in addition to printing or making copies or art design. That is, you may be considered as "production" and not "services". Then, what you will be producing is "goods" and "merchandise". Supposedly, then, all the sales tax applying to that categories of "goods" apply to your production and your business.

On the good side is that you may qualify for manufacturing tax credits. You may qualify for Domestic production activities deduction on first page of Form 1040 adjustment if you can separate out portion of your wages specifically to that domestic production activities.

The not so good part is where you are. The City of Chicago, Cook County, and the State of Illinois are among the most high sales and user tax taxing authorities one can find in the U.S. In addition, new tax laws and rules and regulations develops all the times. No matter what we discuss here, please still go to the City and County and State to verify.

As you probably know, you may need to have a CPA specialized in the area to work with you so that if anytime the rules and regulations change, you will be notified. Below are some links which you may find interesting for reference. At this point, I would error on the safe side and consider the production as "goods," and "merchandise". Of course, based on what your use is, it could be "art", too.

I would say that you have to give State a call and trace down the official answer. Even when we call, when we have arguments, later on, it could still be different interpretations. Document your call, contacts made, and result. Find a professional CPA to do your sales tax returns for you. Yes, there are other 3-d printing companies. But don't do what they do. Find the original source and answer from the taxing authorities. I cannot find a printed rule and regulation on 3-d. You have to find an official answer from the City, County and State. Below is the State telephone number.

Regards,

Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP

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https://betterworkingworld.ey.com/disruption/printing-tax-explained?WT.mc_id=20013192&utm_source=Google&utm_medium=cpc&utm_campaign=US_Generic_BBWW_Disruption&gclid=CIvnl4fp3c4CFZKBaQodHyIBdg

http://www.chicagobusiness.com/article/20151031/ISSUE01/310319999/aiming-to-be-the-uber-of-3-d-manufacturing

http://www.chicagobusiness.com/article/20160102/ISSUE01/301029990/a-little-metal-bender-goes-big-into-3-d

http://www.cityofchicago.org/city/en/depts/fin/provdrs/tax_division.html

http://tax.illinois.gov/Publications/Bulletins/2016/FY-2016-04.pdf

http://www.revenue.state.il.us/publications/pubs/pub-113.pdf

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