After decades of
key component improvements, robots are mainstreaming into the
American economy. Key robot components that have greatly
improved in recent years include:
Moreover, the robots that are mainstreaming are much simpler,
enabling easier and shorter implementation times. High volume
robot sales are now occurring in multiple vertical markets
including consumer goods, manufacturing, warehouse, medical, and
agricultural markets.
The substitution of human workers by robots has multiple tax
impacts. Human employment reduction will reduce payroll taxes,
unemployment taxes and all employee related benefit costs. A
robot can work 24/7, excluding time allocated for repairs and
maintenance, and doesn't need time off. Multi-state corporations
that utilize robots at a particular location will pay less state
income taxes in that jurisdiction compared to other locations
that do not utilize robots to the same extent. For example, a
company with multiple warehouses that converts one warehouse to
Kiva inventory picking machines may pay less corporate taxes to
that jurisdiction.
This result occurs because state corporate income allocation
will usually include a payroll allocation and reduced payroll in
a jurisdiction means a lower corporate income allocation to that
jurisdiction. On the other hand, robot purchases may be subject
to state personal property taxes and possibly sales tax as well,
depending on the intended use. State manufacturing exemptions
may or may not be available for the purchase of robots used for
packaging.
The chart below illustrates some of the growing high volume
robot markets and brands:
Sample High Volume Robot Brands | ||
Consumer | Roomba vacuum cleaners | Manufactured by iRobot. iRobot has sold over 10 million robots worldwide which includes vacuum cleaners, floor scrubbers, pool cleaners, etc. |
Manufacturing | Baxter self programmable robots | Designed and manufactured in the U.S. by Rethink Robotics, Baxter can learn as it works and is able to work in environments close to human workers. Baxter robots are being provided on a complimentary basis to many leading universities. |
Warehouses | Kiva automated material handling systems | Kiva Systems, a wholly owned subsidiary of Amazon.com, consists of several components that work together to allow inventory and components to be moved to any operator at any time. |
Medical | da Vinci surgical robots | Over the past decade, over 1.5 million surgeries have been performed worldwide using the da Vinci Surgical System. This robot is somewhat different than the others in that it is 100% controlled by a human but can be more precise than a human, thus allowing for a less invasive surgical process compared to traditional surgery. |
Agricultural | Harvest Automation agricultural robots | Designed to perform material handling tasks in unstructured environments such as greenhouses and nurseries. Research continues in this rapidly developing field. |
To date robots have not had
a major impact on tax policy, however with increasing
implementation of robots that process increasingly higher
volumes of tasks, robots will impact tax policy in the near
future.
Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.
Lynn Bertrand is a Tax Analyst with R&D Tax Savers.