Farm Tax ?

[hutch4472]

Hey all, I am getting real close to buying a little TLB. Can anyone tell me what qualifies you (me) for the farming tax (2%) here in California. I mean I plan to grow some things that might wind up at our farmers market. And we will have some "farm type animals" but I am not sure I can say I am a "Farmer". But the outfit I may buy the machine from (Kubota L35) says:

"If you are using it for farming then the tax would be 2% or
$16320.00, otherwise the regular 7 1/4% would apply, $17160.00".

Also......can I get some opinions on this price for the tractor? It is a 1996 Kubota L35 TLB with 2348 hours. Looks clean in the pictures, I havent seen it in person yet cause its about 5 hours away. The rubber looks about 50%. Thanks a bunch for all your time....Tom

 

[HomeBrew2]

The dealer told me I could sign the doc that the tractor was for "farming" and the form had some explainitory info from the State. I decided that it was going to be used for "farming" and signed the doc. I presumed that if the State disagreed that what I am doing is farming, the worst that could happen is I'd have to pay the extra tax and maybe a little interest. My invoice was about the size of yours.

 

[hutch4472]

10-4 thanks HomeBrew....

 

[Soundguy]

In Florida, the dealer asked me if my land was 'zoned' Agricultural and/ or had cows/horses.. etc.... did not ask me if I had a farm exemption on my property tax...or if i filed a form F-1 with my income tax. All i had to do was sign the form from the state saying i would use the tractor for ag purposes. ( which i do ).

If the state wants to come check.. i can send them home with a few buckets of various animal maneur's and some fresh eggs to prove it..

I've never had a follow up call from Fl DOR checking this.. and I've bought 3 of my tractors from dealers..

Soundguy

 

[Maka]

Here in Idaho you have to sign a state form that says you are exempt for what ever reason. On it is the farming exemption. If you sign it and I get a state auditor in here he may want to see all of the non-taxed sales and then want want a copy of the form the buyer signed.

They take them back and run a check on that person. If he/she files a schedule "F" farming then it is dropped and not pursued any further as I am told by the state auditors. This is the same for any corporation. If they file schedule "C" then it is dropped.

If you are a small guy who does not file these documents then they will come a knocking, here anyway. If you prove that you are farming then you are OK but if not you will have to pay. How much I don't know. I would certainly talk to your tax preparer or accountant and make sure. I believe that if you don't have to pay taxes then by all means don't but if you do then don't mess with it and just do it.

Maka

 

[DavesTractor]

California is special

You have to be engaged in a farming business, not just a farming lifestyle. Having a huge garden, family orchard, and a couple of cows and horses doesn't cut it unless it is a true farm business. Nor does owning 600 acres in an ag area. They are tough about this. Of course if you sign the exemption form for the dealer, he is off the hook. You are the one that declared you are a farmer and you would be held responsible for the tax and penalties. Of course he must act in good faith, but that is another subject.

Exemption for Farm Equipment and Machinery - Board of Equalization is a link to a page that helps explain this. They do seem to audit these fairly often.

I hope this helps. On the L35TLB, that is a nice size machine. Do be careful of this or any machine if it has been in a rental fleet. If abused they can break like anything else. We've done some front axles repairs in our shop for a local rental yard on their L35's and the $$ can add up quickly.

 

[hutch4472]

Thanks Dave, you happen to have any L35's in?

 

[DavesTractor]

Thanks Dave, you happen to have any L35's in?

None, sorry.

 

[randy41]

The dealer told me I could sign the doc that the tractor was for "farming" and the form had some explainitory info from the State. I decided that it was going to be used for "farming" and signed the doc. I presumed that if the State disagreed that what I am doing is farming, the worst that could happen is I'd have to pay the extra tax and maybe a little interest. My invoice was about the size of yours.

i dunno much about CA law but in most places theres a penalty charged especially for willfully lieing to gain a tax advantage.
don't you guys think its your civic duty to pay the fair tax as required by law rather than trying to avoid it by deceptive practices?

 

[hutch4472]

Randy, I appreciate your reply and I know you are doing the right thing I guess, but.......when I see how much of my paycheck is taken away from me and my family every month to support although alot of good things like the military and such....also so many BS things like all our rediculous Government programs to help EVERYONE except the blue collar middle class American working man..........I will try to pay less tax anytime I can.