The Iowa Court of Appeals has sided with a well-known paint company in its tax fight with state officials.
Sherwin-Williams, a company based in Cleveland, Ohio, sells its paint and related products in 38 stores in Iowa. For years, Sherwin-Williams manufactured all of its paints in a centralized factory and shipped the finished cans to retail locations. But in the 1960s it switched to a decentralized system where each retail location mixes its own paint in the store using base paint and colorants.
The issue in this lawsuit which pitted Sherwin-Williams against the Iowa Department of Revenue is whether the machines used in each store to mix the paint are exempt from the state use tax. This legal tussle has been going on for over four years and the Iowa Court of Appeals has ruled that based on state tax law, it is “illogical” to charge Sherwin-Williams state use taxes on their paint-mixing machines in hardware stores and big stores like Lowes, Menards and Home Depot.