Registering for an ag exempt number?

[Rickster832]

Hi yall. Been looking into getti g an ag exemption number and the process is very confusing to me. Do i have to make a business and then register the business or do i just simply apply for one? Its very confusing. We are new to farming we currently have 3 calves and 2 goats. We are bearly starting up and would like to get it to help out with costs around here. Can anyone give me any advice?

 

[sstterry]

Welcome to the Board. The answer to your question will depend on where you are located. If you are in the US, it is State specific.

 

[greybeard]

Yep, if in a different state, you will likely have different requirements than in my state, and you may have different requirements in your county than another county in your same state. Texas, says you need a minimum of 10 acres, but they allow the individual counties to decide, and my county sets the minimum at 20 acres.
If your land has been 'off ag' for any period of time, there 'may' be a waiting period before the exemption kicks in as well.
It was very easy to sign up for it back when I 1st did it, but I have read elsewhere that some states make it quite difficult, while I've also read that some places allow almost any kind and size of ag operation to qualify, even in people's back yards.

Are you trying to get an ag exemption for property taxes or an IRS exemption for stuff you buy?
A sales tax exemption card? They are all different but are 'connected'.

Your county extension agent should be able to point you in the right direction.

 

[Rickster832]

Yes i live in texas as well. And i think the requirements can be less that 20 acres.

 

[greybeard]

Depends on the county. Some counties, because of rainfall and growing season lengths, & whether the land is open pasture or wooded, the land can carry more livestock per acre because it grows better grass. My county is definitely minimum of 20 acres with an exception for beekeeping. 5 acres min for beekeeping with some max acreage restrictions on that.
The following is not my county, but is roughly the common requirements for a Texas county.
http://www.caldwellcad.org/data/_uploaded/file/public/2014%20Ag%20Qualifications%20Packet.pdf

This following goes into a little more detail for Ellis County Tx. Note the requirement that the land must have been in ag production for 5 of the previous years before applying for the exemption. That, is pretty common for all Tx counties. I've seen lots of people buy a parcel of land, fence it, put livestock on it and go apply for the ag exemption and get upset when they find out they don't qualify because the land was previously used for non-ag purposes.

https://www.elliscad.com/tax-info/
https://www.elliscad.com/ag-frequently-asked-questions/

 

[ChrisB]

Is the minimum acreage land owned or land farmed/ranched? For example, if a person lived in town and rented a place to run cattle? Is an ag exemption number different than a state/federal tax number issued to the business? Just curious.

 

[greybeard]

Is the minimum acreage land owned or land farmed/ranched? For example, if a person lived in town and rented a place to run cattle? Is an ag exemption number different than a state/federal tax number issued to the business? Just curious.

The OP didn't really say, but I believe he/she is inquiring about property tax exemptions instead of the fed/state tax id # which is for sales tax and federal tax use.

It is the land that is actually being used for ag production..not total land owned in the parcel. For instance, here on my place, the area where my house is located is not under ag...about 1 acre. It IS under homestead exemption but the exemption amount for homestead is less than what the property tax ag exmption is tho there are other prevailing non-taxation reasons for declaring one's home & yard under homestead. If the county appraisal district really wanted to get pissy about it, I have my long approach road fenced off from the cattle and the county "could' drop that off ag if they really wanted to. 1/4 mile long X 45' wide= 1.4 acres that really isn't being used for production. (fenced off so we don't have to open and close gates every time we drive in or out.)

Yes, a property owner that lives in a city but owns some rural land can get a property tax exemption on that rural land if he has leased/rented his land out to someone else for ag production. That 'someone else' is known as the 'operator'. If you've ever filled out that convoluted big package called the USDA Ag Census, you probably saw the section for "Operator". All the rest of the requirements still exist tho.

My oldest sister after years of raising cattle, sold all her cattle in 2011, immediately leased her pastures to another cowman and is able to keep her ag exemption under the 'operator' deal. It's not about ownership..it's about the land's ag production. The legal land owner gets the property tax ag exemption of course..not the operator.

Farm Operator and Principal Farm Operator
The farm operator is the person who runs the farm, making day-to-day management decisions. The operator could be an owner, hired manager, cash tenant, share tenant, and/or a partner. If land is rented or worked on shares, the tenant or renter is the operator. In the most recent (2018) Agricultural Resource Management Survey (ARMS), information is collected for up to four operators per farm. In the case of multiple operators, the respondent for the farm identifies the principal farm operator during the data collection process.

 

[TexasBred]

Hi yall. Been looking into getti g an ag exemption number and the process is very confusing to me. Do i have to make a business and then register the business or do i just simply apply for one? Its very confusing. We are new to farming we currently have 3 calves and 2 goats. We are bearly starting up and would like to get it to help out with costs around here. Can anyone give me any advice?

Go talk to the folks at your central appraisal district . They should have the information you need.