WI tractor Sales Tax for timber use

[Rock knocker]

However, I don't see anything about an exemption for timber use

Silviculture is under the farming exemption

 

[motownbrowne]

Silviculture is under the farming exemption

Huh, look at that. Thanks for pointing that out. I'm no tax expert, but it looks to me like the OP ought to be getting his tractor without sales tax.

So, if silviculture is a farming activity, I wonder if the OP could also file a schedule F (if he doesn't already), and write off the expense of the tractor and all his other wood cutting expenses. Of course you'd need to report your wood sales, or other revenues, but it'd likely be a loss which could reduce income from your primary job. Just thinking out loud here. Might be worth a chat with a tax professional.

 

[Rock knocker]

I would think that was the case

 

[varmint]

I wouldn't over think this... unless you are on shaky ground already with the taxman because of other questionable dealings. The dealer is the one likely to get audited, if anyone is, and farm use is legitimate for exemption in most states. Plus, in most states, stuff bought out of state is not subject to sales tax UNLESS the purchaser chooses to report it. Most state tax agencies have enough to do without probing into otherwise honest citizen's affairs.

 

[TractorGuy]

Huh, look at that. Thanks for pointing that out. I'm no tax expert, but it looks to me like the OP ought to be getting his tractor without sales tax.

So, if silviculture is a farming activity, I wonder if the OP could also file a schedule F (if he doesn't already), and write off the expense of the tractor and all his other wood cutting expenses. Of course you'd need to report your wood sales, or other revenues, but it'd likely be a loss which could reduce income from your primary job. Just thinking out loud here. Might be worth a chat with a tax professional.

He will have to claim income on timber sales any way you shake it. You can get a forester to estimate the value of the timber when you bought the property and deduct that from what you sell the timber for. The difference is income, not the whole amount you sell the timber for. If the property was owned over a year from date of timber sale it might come under capital gains. Less than a year I think it's regular income at a lower tax rate.

 

[motownbrowne]

He will have to claim income on timber sales any way you shake it. You can get a forester to estimate the value of the timber when you bought the property and deduct that from what you sell the timber for. The difference is income, not the whole amount you sell the timber for. If the property was owned over a year from date of timber sale it might come under capital gains. Less than a year I think it's regular income at a lower tax rate.

I guess I was a little vague. I'm sure he'll have to report the timber income (just like any other income, I suppose). I know that's sort of a complicated equation with a few variables.

What I was referring to is the profit (or more likely loss) of his "silviculture" activities moving forward. If a tractor is exempted from tax because the use is for silviculture, which counts as farming, then the OP should be able to write it off on a schedule F. He should also be able to write off diesel fuel, chainsaw fuel, chains, a skidding winch, etc.

Not including the income from the timber sale, the OP might be able to declare a "loss" of several thousand dollars per year, which would reduce his taxable income from any other sources. An accountant might tell you that the IRS would like to see a profit after a certain number of years, otherwise they'll say it's a "hobby" and as such you can't deduct your expenses. However, farms get a little leeway on this I think, since many farms operate at a loss for several years at a time.

Again, I'm not an accountant, but it might be worth a short meeting with one.

 

[Deere Dude]

Zero intent to write anything off. In all honesty, it will take years to clean up the "carnage" from the logging at the rate/time available we have to do so. The only time taxes would be an issue is at initial purchase, no intent to depreciate or write anything off.

I bought a tractor from Missouri and had it shipped to Wisconsin figuring I would pay no tax. I had no business, just a guy trying to save a buck. I had a zero interest loan for 3 years I believe.

The next spring I had to do taxes and found I didn't have to pay sales tax, but they call it a use tax. No getting around it. Then I decided to just claim it and pay the tax, but by then there was a penalty, a stiff one.

Unless you have a business you are screwed. Don't buy it and then wait a couple years and get a conscience or you will pay through the nose.

Pay up now and don't need to look over your shoulder for the next 7 years. Besides, I am sure the state can use the money more than you

 

[motownbrowne]

I bought a tractor from Missouri and had it shipped to Wisconsin figuring I would pay no tax. I had no business, just a guy trying to save a buck. I had a zero interest loan for 3 years I believe.

The next spring I had to do taxes and found I didn't have to pay sales tax, but they call it a use tax. No getting around it. Then I decided to just claim it and pay the tax, but by then there was a penalty, a stiff one.

Unless you have a business you are screwed. Don't buy it and then wait a couple years and get a conscience or you will pay through the nose.

Pay up now and don't need to look over your shoulder for the next 7 years. Besides, I am sure the state can use the money more than you

I agree with you, although "farming" is a little different. My dad farmed vegetables for 40 years as a sole proprietor. He never used anything other than his social security number on tax exemption forms, which he had on file at numerous local businesses.

I'm not saying that the OP should necessarily conduct business this way, but if silviculture is considered ag exempt, he doesn't need a business license or federal ID number to take advantage of the tax break.

 

[MHarryE]

I am not sure how logging relates to agriculture but I live in Minnesota, have bough 5 tractors and one mini-excavator in Wisconsin from 2 dealers, and have only had to fill out one tax exempt form checking off agricultural production, at each dealer. No state IDs, nothing special, just fill the form out at the time of sale. Its now 7 years since I bought the first one, the hydraulic excavator, and it is the only one that came back. Two years later the dealer claimed they lost my original form and I needed to fill out a new one. Fortunately I filed a copy of the original with the other paperwork and I resent it. Logging my at be different in WI. I pay off highway fuel tax in MN for e.g. but they make a person doing other work pay sales tax on site and file a rebate with their income tax.