Companies in Wisconsing that use their own fleet of trucks to deliver goods to their customers can benefit from establishing a separate transportation company. A transportation company is provided a sales/use tax exemption for the following purchases:
- Trucks
- Trailers
- Accessories for trucks & trailers
- Repairs to trucks & trailers
Typically, the transportation company is a “single-member LLC” that is 100% owned by the operating company, thus it is invisible for Federal and Wisconsin income tax purposes.
The C&G team offers a turn-key approach in preparing a cost versus benefit analysis, setting up and registering the entiy, determining and documenting the monthly transactions between the operating company and the transportation company and assisting legal counsel in drafting the appropriate documents.
An example of the annual savings for a distribution company:
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Annual Expenditures |
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Replacement of two trucks |
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$ 124,000 |
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Repairs to truck/trailer fleet |
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60,000 |
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184,000 |
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Sales tax rate |
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5.50% |
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Annual benefit of |
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Avoided sales tax |
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$ 10,120 |
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