Will increasing Excise Tax on Chinese Imports significantly increase the cost of your anticipated upgrading to LED Lighting?
The changes in our trade policies concerning excise taxes do apply to LED luminaires and LED components that originate in China. At present there is a 10% excise tax in place up from the 3.9% we have been working with and the tax is scheduled to increase to 25% on January 1st, 2019.
We received notice last week from our primary Chinese suppliers about these expected increases so they are real and something that concerns all. Whether you support or oppose these increases and the impact they will have on goods we use in the USA, most are aware of what is going on.
The excise tax will significantly increase the cost on solid-state lighting and the LED lights that many businesses are now using or plan to use in the future. The prices now offered by these manufacturers already offered at low margins, so we cannot expect to see a decrease. In fact, we expect to see product cost at the manufacturer level increase in 2019. Solid State Lighting has matured and those that survived the price wars of the last few years will need to increase product cost to service the market demand.
Those are not the only cost increases that will need to be absorbed in 2019. We are seeing increases in rates for electricians, transportation cost continues to rise and invariably the cost of logistics goes up. We see business costs increasing in 2019 in most all phases of what we deal with.
Good financial management requires that we plan and schedule purchases to take advantage of anything that will improve the bottom line and the investment return. LED lighting upgrades are an investment and the market philosophy of buying low should apply.
We guard against buying products advertised as cheaper or promising to absorb excise taxes because to do this something has to be compromised. Whether it is the product, where a common technique is to offer a low price but fail to point out the technology is an older generation or a company that is absorbing the cost, threatening their long term existence, beware.
Purchasing and installing LED lighting is an investment in your infrastructure that is going to operate for 100,000 hours or more. You want to be sure the buy decision you make is future proof. Don’t buy solid-state lighting that in a few years will be nothing more than just lighting when all around you shrewd buyers are realizing lighting is more than something to illuminate space with. The newest generation of lighting, the lighting you must buy, is an exploitable network.
Lumens For Less offers a new generation of seamless Bluetooth Mesh Controlled Lighting Networks that are future proof. Our seamless, secure and user friendly system of solid state lighting offers a tool that requires no special commissioning, no expert to manage it, and is a “plug and play system”.
Contact Lumens For Less to schedule an LED upgrade at your facility before you are forced to absorb increasing costs in 2019.