To pay...or not to pay

[unreconstructed]

I am a Texas CPA and cannot comment on Florida law but will comment on your situation. You have two choices--follow the law to your best ability and have a clear conscience or cheat.

If you want to follow the law, you can approach it several ways. You can go to your county tax people and ask them what it takes to get an ag exemption. If Florida is like Texas, the law states clearly what is required (so many goats, cattle etc per acre or x amount of crops). If you don't trust government employees to give you the straight answer, pay a CPA to tell you. Or, look up the Florida statute yourself.

One thing I can tell you is that tractor salesmen, car salesmen, etc while usually having some knowlegde of tax law, seldom get it all right. Often they get it all wrong.

 

[DavesTractor]

California requires a farm BUSINESS, not just a farm lifestyle. A person could have 600 acres, a few head of cattle, a huge garden, 50 fruit trees and some horses. But if it is all a hobby and not a business, full tax applies. It looks like all the states have a different twist on this as it is a state tax, not federal.

 

[BillG_in_TX]

I am a Texas CPA and cannot comment on Florida law but will comment on your situation. You have two choices--follow the law to your best ability and have a clear conscience or cheat.

If you want to follow the law, you can approach it several ways. You can go to your county tax people and ask them what it takes to get an ag exemption. If Florida is like Texas, the law states clearly what is required (so many goats, cattle etc per acre or x amount of crops). If you don't trust government employees to give you the straight answer, pay a CPA to tell you. Or, look up the Florida statute yourself.

One thing I can tell you is that tractor salesmen, car salesmen, etc while usually having some knowlegde of tax law, seldom get it all right. Often they get it all wrong.

My understanding of Texas sales tax is that it's like Dave described in California - having an agricultural exemption on your property does not exempt you from sales tax on equipment purchases. The tractor or implement or equipment has to be used for ag purposes to be exempt from sales tax.

I have an ag exemption on my acreage, as my neighbor runs his pet longhorns on the property, but my implement purchases would not be legally exempt from sales tax, since they are not used for agricultural purposes. Try telling that to the TSC folks and they look at you like you have just disembarked from a spaceship. They ask if you have an ag exemption and if you do, they say they don't charge sales tax. It may not be correct, but I'm not going up the food-chain at TSC to get them educated.

 

[Farmwithjunk]

California requires a farm BUSINESS, not just a farm lifestyle. A person could have 600 acres, a few head of cattle, a huge garden, 50 fruit trees and some horses. But if it is all a hobby and not a business, full tax applies. It looks like all the states have a different twist on this as it is a state tax, not federal.

Same in Kentucky. Just because you call it a farm doesn't make it so. Hobby farm and production agriculture are 2 TOTALLY different things. I don't want to insult ALL the sales people who might read this, but in general, MANY salesmen will tell you A.) whatever they think you want to hear, B.) Whatever is easiest for them to deal with. C.) Whatever will make a sale. I know of one salesman that offered a buddy of mine the opportunity to use his (the salesman's) farm I.D.# to avoid tax liability.

Best to check before jumping in the shallow end of the pool.

 

[unreconstructed]

BillG,

You are correct that a ag exemption for property tax does not automatically mean a sales tax exemption; however, one would think that someone who claims a sales tax exemption for ag use based on ag use on his own property would have or have applied for an ag exemption on that property.

 

[AndyMA]

BillG,

You are correct that a ag exemption for property tax does not automatically mean a sales tax exemption; however, one would think that someone who claims a sales tax exemption for ag use based on ag use on his own property would have or have applied for an ag exemption on that property.

You would think that, but remember in my town in Conn. It takes $2500 in costs or income to get the farm exemption for sales tax and $15,000 in income to get the land classified farm. Big difference. Obviously many properties that can be exempt to get sales tax exemption and farm license plates can not get the ag designation on their land. You can get an "Open Space" land classification for your land without the income requiremet but it is not as good as farm land. Much better than residential though.

Andy

 

[unreconstructed]

Anyhow, the point I was trying to make with the gentleman from Florida was to consult with someone expert in Florida taxation and not to take "coffee shop" opinion as gospel.

 

[daTeacha]

Ohio is all or none for sales tax. It seems based on how much ag stuff you do, but I don't know that there any numbers attached to it. The majority of farms here also have other income to cover health insurance and such. I just go along with the wife's sheep farming activity. If it's for the sheep, tractor, barn use, etc. then we don't pay the sales tax. All it needs to be is "ag related" at the word of the buyer, who signs a form and takes any risk there might be.

 

[EAEValid]

Thanks to all that reply.

I now have a plan. The 1st thing is to determine from my property tax bill. (Thanks Soundguy for that suggestion.)

From there if it gets fuzzy talk to the property appraiser.

If that is unclear talked to a CPA registered in Florida.

You guys are the greatest. All of your suggestions/advice is helping out. I am really a novice in this area.

Again tahanks to all...

eddie....

 

[Soundguy]

I just noted I should have said one more thing. In Conn the Ag Sales Tax Rate is ZERO. No tax on products used in the production of Ag products.

Andy

It would be nice if there were uniform laws.

In florida, as I and fireman point out.. ag tax for tractors is low.. like 2.x% vs 6.X.. however.. things like feeds.. 0%.. etc.

Soundguy