[sanguine]

I recently took a job at a manufacturing company in the Oil/Gas industry and one of our engineers asked me a question or rather he told me something that really stumpted me. He told me that inventory gets taxed at a much higher rate for the SMI (slower moving inventory).  Basically that inventory is aged and the longer it sits in inventory the higher the tax rate is on it. Now… I knew that inventory was taxed, but I didn’t think that the tax rate for a class 7 inventory item (slow moving) would be taxes at ~ 79%.  This doesn’t sound right to me so I was wondering if anybody could possibly make sense of this for me?