sales tax question

   / sales tax question #1  

mattman

Gold Member
Joined
Aug 28, 2008
Messages
276
Location
ElDorado,AR
Tractor
Kioti DK 35
I was wondering what the rules are as far as having to pay sales tax on a new tractor from out of state? In Arkansas you have to pay sells tax on a new tractor but not a used one. The two closest states are TX and LA does anyone from either state know your states sales tax rules?? I have paid alot of sales tax on fourwheelers and used vehicles to feel bad about trying not to pay AR sales tax on a tractor. If you have a farm you don't have to pay sales tax but I don't have a farm. Sales tax adds up to another $1500 or so:eek:. That makes the tractor cost some more.

Thanks Matt
 
   / sales tax question #2  
Unless you have to register with the state with some type of license for the tractor, how would they know? Besides if you have enough land and engage in farming activities, you should get some type of exemption from the state. I just got my exemption fron the state of TN for registering my property as part of the Greenbelt. It reduces the property taxes and exempts you from sales taxes on things you by to farm or maintain the land.
 
   / sales tax question #3  
I have read here I think that if you get a bank loan for the tractor, the bank reports the sale for tax purposes.
 
   / sales tax question #4  
Unless you have to register with the state with some type of license for the tractor, how would they know? Besides if you have enough land and engage in farming activities, you should get some type of exemption from the state. I just got my exemption fron the state of TN for registering my property as part of the Greenbelt. It reduces the property taxes and exempts you from sales taxes on things you by to farm or maintain the land.

You got a farm sales tax exemption just by putting your property in the greenbelt program?
 
   / sales tax question #5  
I have read here I think that if you get a bank loan for the tractor, the bank reports the sale for tax purposes.


From my understanding - IF you finance it thru the mfg they will also file a lien with the State Corportation Commision (at least that is what they call it here in VA) that will also trigger a review to see if you pay the sales tax..

In VA a few yrs back the Dept of Taxation did a desk audit of all exempt forms completed for tractor sales through Virginia dealerships.. The letter stated 'prove this was for actual agricultural use or pay the tax as indicated within this letter'. They collected quite a bit of sales tax this way, it seems that anyone with a yard would be willing to sign the exempt form to get out of the sales tax.

Brian
 
   / sales tax question #6  
Unless you have to register with the state with some type of license for the tractor, how would they know? Besides if you have enough land and engage in farming activities, you should get some type of exemption from the state. I just got my exemption fron the state of TN for registering my property as part of the Greenbelt. It reduces the property taxes and exempts you from sales taxes on things you by to farm or maintain the land.
Must B nice.
 
   / sales tax question #7  
Not sure if you want to travel this far, but South Carolina has a $300 cap on vehicle taxes. Doesn't matter if it's a $20k tractor or a $400,000 Bently, $300 is all you pay. Nice huh? Of course they get you on property taxes, but only on vehicles that must be registered/tagged. Tractors are exempt. However, if you have a farm number, there is no state tax.
 
   / sales tax question
  • Thread Starter
#8  
Well in Arkansas we pay sales tax on the full amount there is not a cap on the amount you pay. We also pay sales tax on used vehicles atvs boats etc, until whatever it sells falls below 2500 dollars. So the state gets extra tax money on used vehicles that have already had sales tax paid when it was bought new. Bill Clinton is who we have to thank for this in the state of Arkansas. We also pay personal property taxes on just about everything. Farm use is about the only way to get out of paying sales tax. I need a farm, I would have alot of stuff wrote up as farm use.
 
   / sales tax question #9  
In Texas if it is for farm use, there are no taxes.
 
   / sales tax question #10  
Yes, it's one of the items required to qualify. The application in section 9 states that the applicant must meet at least one of the folowing to qualify. The choices are:

1. the owner or lessee of ag land from which at least $1000 or more were produced or sold.
2.The business of providing for hire custom ag services for plowing planting etc.
3.The owner of the land that qualifies for taxation under the provisions of the Ag Forest and Open Space Land Act of 1976
4.Have a Fed income tax return that contains a schedule F or form 4835
5. Otherwise establish to the satisfaction of the Commissioner of Revenue that the individual is actively engaged in the business of producing and harvesting ag commodities.

I qualify under two of the criteria, 1 and 3, but only one is required.
 
 
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