Sales Tax at Co-op

[Chuckie]

The Co-op that I do business with, charges sales tax on any farm item that is under $250. It has to be one item that over 250. And if you buy three and they total $675, and if one item is $259, and the next is $225, then you don't have to pay tax on the $259, but you must pay the tax on the $225.
I called the man back and he told me that it was a Co-op policy to charge this way.

I bought several water tanks, automatic waterers, misc. items such as medicines and fencing products, and some feed bunks. Each time, one item doesn't equal to $250, but yet the total is way above it. But they said I couldn't add them together to equal the $250.
Does this sound right?

 

[jkwilson]

My thought would be that it is possibly illegal, because I bet they are collecting it and not paying the state. I would call the state and ask about it. 615 741-3580 is the Tennessee Dept of Revenue number.

 

[J]

Is there anywhere else near you that you could buy from.
If so I would look into switching, sounds pretty fishy to me. I always thought the ol'boys at the Coop were out to help the people that buy from them.
Keep us updated on this one for sure, this type of thing affects everyone on the board.

:cboy:

 

[Chuckie]

I am going to call a Co-op in another county to see if they do the same thing. I talked to a man that used to work there, and he said that they do not charge tax on Farm supplies. I had never heard of that before. I'll let you know what I find out.

 

[sidney411]

Almost everything I but at our co-op is farm use - tax free. That sounds like their jipping you.

 

[Rustler9]

They don't charge me tax-sounds like a good gouging.

 

[A6gal]

Anything purchased around here for farm use is tax-exempt. The price of the item doesn't matter. I always just tell them it's farm use and there's no questions asked at most places. Some places do require you to sign a form stating it's farm use.

It sounds like somebody at your coop is making their own rules as they go.

 

[HatCreekFan]

ooooh, Chuckie. Never heard of that stuff. All of it shoulda been tax exempt. Come on up to Kentucky, they'll treat you right in Murray.... ;-)

 

[Chuckie]

I am going to have to check tomorrow on the prices. I couldn't sleep from the cotton pickers running and such right up next to the house. I tried though. It does sound like I am going to have to drive up to Murray to get a good deal HatCreekFan.
I am afraid I have just be gouged right where I don't wanna be.
Grrrrrrrr!

 

[Running Arrow Bill]

As a rule, anything used for bonafide farming and ranching for the production of crops (grain, feed, hay, livestock) is sales tax exempt. If I'm not mistaken this is a nationwide rule.

If a place won't sell you sales tax free, even with filling out a tax exemption certificate, then I wouldn't buy from them. If you MUST get an item there and they make you pay sales tax, then save your original receipt (preferably have them make you an itemized receipt in place of an obscure cash register one) and forward a complaint to your State Comptroller's Office. You should get a refund and they will have a lot of questions to answer...

In our neck of the woods in Texas Panhandle, we occasionally buy items from businesses in Oklahoma. We had to contact the State of Oklahoma to get a "Tax Exempt ID Card" to present to any Okla merchant where we buy farm & ranch supplies from (e.g., some Big Box Stores, etc.). Otherwise, without an ID card, Okla doesn't recognize a farm & ranch operation that is out of state.

P.S.: It will simplify your purchase a lot if you use a bonafide business check on your farm & ranch operation and/or a business credit card. Using a personal check and driving up in your Porche may be a little suspect...LOL.

 

[ctlbaron]

I think the rule of thumb here is no tax on feed, seed, fertilize,brush killer and baler twine. Everything else is taxable. 8)

 

[SPRINGER FARMS MURRAY GRE]

It may vary from state to state.Here in Arkansas feed,vet supplies,feeders,hayrings etc are tax exempt but you pay taxes on fencing.Go figure. :cboy:

 

[Crowderfarms]

I think the rule of thumb here is no tax on feed, seed, fertilize,brush killer and baler twine. Everything else is taxable. 8)

Here's the low down on Farm Related purchases in Tennessee.
There is sales Tax on all Fencing, Gates,Feeders, Nails,& other Hardware.
There is NO Sales Tax on: Tractors, Implements, Feed,(other than Pet Feeds) Fertilizer, Seed,Supplements,Twine and other related products.
The TDR will at sellers descretion, allow some troughs and feeders to be exempt, for Cattle.
The CO-OP you have been dealing with needs to be turned in to the State. Supposedly, they are a not for profit outfit. We ALL know better. They have from what I have been told around here for years, have preferential treatment of certain individuals, mostly larger operators, as far as pricing goes.In other words, if you're so and so, you get a better deal.I know folks that go nowhere BUT the CO-Op, and others that will never step foot in one.

 

[D Land]

Can anybody clarify sales tax situation on farm related purchases in Georgia? My understanding is that farm equipment is exempt but not supplies.

 

[jersey lilly]

Anything that you can use on the farm and buy at the coop or a feed store, or tractor supply for that matter can be tax exempt. All you hafta do is fill out the farm exempt paper work, takes all of 5 minutes. I'm not saying everything you buy in those stores is tax free, but if it can be used on the farm/ranch it can be exempt. The list is endless.

wonderin if ya'll know that you can take all your supplies and such off your income taxes too?

 

[Crowderfarms]

Anything that you can use on the farm and buy at the coop or a feed store, or tractor supply for that matter can be tax exempt. All you hafta do is fill out the farm exempt paper work, takes all of 5 minutes. I'm not saying everything you buy in those stores is tax free, but if it can be used on the farm/ranch it can be exempt. The list is endless.

wonderin if ya'll know that you can take all your supplies and such off your income taxes too?

AS long as that State has a Law that allows the exemption. It varies. You can not get around paying the tax in TN. for example, without a tax number,ie,Certificate of Resale. There is a form you can also submit to the state for certain refunds on sales Tax paid.As far as Federal Income Tax, all can be deducted as expenses, and depreciated. Now I'm getting out of my league with the rest, as far as CPA type things.

 

[MrBilly]

The tax situation in Georgia is pretty much as Crowderfarms stated for Ten. Only thing I would add is that most people who raise only horses do need to pay sales tax on feed because they are considered a hobby person, not sure if there is a guy who makes his living raising and selling horses, what does he do?

Billy

 

[Crowderfarms]

The tax situation in Georgia is pretty much as Crowderfarms stated for Ten. Only thing I would add is that most people who raise only horses do need to pay sales tax on feed because they are considered a hobby person, not sure if there is a guy who makes his living raising and selling horses, what does he do?

Billy

Good question. I know the State of Kentucky is going to do away with Tax on Horse Feed in the near future.A lot of Feeds, manufactured in KY. have a loophole right on the Feed Tag. Even though it's Horse Feed, it's labeled "A Concentated Ration For Beef Cattle" Now aint that slick?

 

[Chuckie]

CrowderFarms, I cannot locate the law now, but will have someone tell me how to get to it. I looked and looked, but had no success with finding it. If this computer would hook up higher than 24000 bps, I could look longer.
Anyway, the part that was read to me said that anything, even the feeders are taxed because they are less than $250. If you know of a site that I could run the law off that says the cattle feeders and waterers are not taxed, I would take it to Co-op. It also said that taxes are not put on replacement parts to any equipment. And as far as anything, the $250 rule is true. Now, someone prove to me that this is wrong, "Seriously!!!" I would love to go marching in there with it to see if they correct it!

 

[Chris H]

The co-op is probably right. Look up http://www.state.tn.us/revenue/tntaxes/salesanduse.htm. Under the FAQ, #17 addresses farm purchases. Also, on the page this link takes you to type in 'farm' in the box above 'Search Revenue'. Search and the first document(.PDF file) that came up for me is the exemption form required for tax exempt purchases. The second page of that document clarifies what is exempt, first sentence says:" "Farm equipment and machinery" means any appliance used directly and principally for the purpose of producing agricultural
products, including nursery products, for sale and use or consumption off the premises, the retail price of which, for any such single article, exceeds $250;" .