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Sometimes referred to as intermediate or intermediary goods, industrial goods are any type of products that are used in the production of other goods. This can include a wide range of raw materials, as well as various components that are eventually assembled to produce a finished product. Machinery used in the production process is also often classified as an industrial good.
One of the more common types of industrial goods are the raw materials used in the creation of various products. These raw materials undergo some type of fashioning or transformation in preparation for use in the manufacturing of different kinds of goods and services. At times, these raw materials are leftovers from the creation of other products, as with the remnants of oil sludge that are used to create various types of artificial fibers. Those fibers are eventually used to manufacture upholstery for furnishings, car seats, and various other textile products.
In addition to raw materials, industrial goods also include the resources used in the actual production process. For example, hammers, drills, screwdrivers, and other types of tools would be considered to be these types of goods, since they are used in the process of assembling parts for the creation of different products. In like manner, machinery and equipment that is used in the manufacturing process would also be considered industrial types of goods. This would include heavy equipment such as molds for plastics and metals, heating and cooling chambers, and even machines used to automate the packing process for the finished goods.
Replacement parts on the machinery used in the manufacturing process often qualify as industrial goods. This is because without the replacement of worn parts, the ability to produce finished goods is diminished significantly. Thus, a bearing, a cog, or even some type of circuitry that is essential to the operation of heavy machinery in a manufacturing plant will be classified as industrial.
Differentiating industrial goods from finished goods is not only helpful in defining various segments of the production process. Correctly classifying the products that are actively used in the production of finished goods can also make it easier to comply with tax regulations that are in effect in the area where a company bases its operations. In some nations, the tax debt for these goods is significantly lower than for finished goods, while in other areas there is no tax debt accrued on industrial goods at all. When this is the case, it is to the advantage of businesses to accurately define their industrial good inventories, in accordance with the regulations that apply in their geographic areas.
@giddion - I am an artist, so I suppose that my industrial goods would be paint, canvas, and paintbrushes, among other things. I have been keeping up with every receipt from the art supply store, so if I actually sell any of my paintings, I will be prepared to do my taxes.
I am pretty sure I will need actual proof of my expenses, so I'm hanging onto the receipts. I have a feeling I will probably be reporting a loss this year, so having them will really help me out.
I would hate to have to pay taxes on a losing business. Right now, I'm just starting out, so I don't expect miracles.
My husband works in construction, so his industrial goods are his hammer, drill, saw, and all the things that he uses to make the finished product, which is a house. You might also call these things industrial equipment.
He works on a freelance basis, so he has to bring his own industrial goods to each job. He is able to deduct the cost of these goods from his taxes, so he doesn't owe as much as he would if he were using someone else's equipment.
Of course, he was only able to use that deduction for all his tools the first year that he started doing this. After that, he could only deduct whatever new tools he had bought during the previous year.
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