[Gvl_M3]

You have a pretty good understanding of the Fair Tax. I've asked some questions about depreciation, but no one as addressed the specific question, which I don't think I'm expressing very well.

Here goes:
The large corporation that I work for has 30 plants in the U.S. At my plant, we have to write off 1/7th of our capital budget each year for depreciation. This is roughly $1,000,000. Lets assume it is the same at the other plants.

Under the FairTax, would this $30,000,000 fall under our income, expense, or where? Is this some of the hidden burden of the current income tax?

From reading the Fair Tax book, I understand that there are burdens of the current system that are not direct tax dollars, but more the cost of complying with the current system. I'm just trying to figure out where these costs are located.

[ancient_geezer]

Depreciation is an income tax deduction taken for reduction in value of a business asset for wear and tear.

As regards the FairTax, all business purchases are tax exempt. Only customers purchasing for final consumption (i.e. personal as opposed to business use) pay the tax.

Depreciation of a business asset has no tax meaning under a single stage (i.e. tax once) retail sales tax except in the situation that asset were to be sold as a retail item to a consumer (as opposed to another business). Then the market value of the asset established by its consumer sale at that time, would establish the retail sales tax to be collected by the business from the purchaser.

The key factor is in the sale for final consumption. In general whatever value of an item exists at its sale to a consumer, as opposed to a business, is the basis of the retail tax paid by the purchaser.