TN Farmers Tax Exempt

[12Bravo]

I'm not sure I posted this in the right section, If not please move to where it should be.

This post is about using the TN Farmers Tax Exemption for tractors and other agriculture related items. I have applied for this exemption and plan to use the tractor to help get rabbit and chickens ready for the market. Along with making preparations for goats and hogs in the future.

My questions are focused on other TBN members that have this exemptions and what paperwork and forms that are needed to keep track of expenses and income for the following tax season. I'm new to this and want to cover my azz, last thing I want is to be audited and have to pay all back taxes over a simple clerical error.

 

[LD1]

Dont know much about TN. But is this your primary source of income? Or is this more of a hobby farm?

In ohio, as far as taxes go, they are treated differently.

 

[JRobyn]

My advice (FWIW); find a good tax guy, experienced with agricultural deductions. Ask around at places like the local coop. We have used the same guy for 30 years. He/we claim deductions (Federal and State) for almost everything related to our farm, regardless of "hobby" status. Evidently the IRS rules for determining this status are not quite as rigorous as they used to be. Or at least not as enforced.

TN may be different, as we have just changed permanent residence from GA to TN. So far, we have used the TN Farm Tax Exemption to get tax-exempt farm fuel. We put all farm-related expenses on one credit card to the extent possible. The monthly CC statements are all that we use for documentation. Keep receipts for other significant non-CC expenditures and any income.

 

[kevin37b]

Most of the farmers around here are sales tax exempt 4000 5000 ACRES . I am sure glad my TAX dollars are going to a good cause .

 

[FTG-05]

Ignore all the above. It's far simpler than that.

I have the TN tax exemption and have had it since Oct/Nov 2013 just after I closed on my property in TN. It's a simple form you fill out at your local county court house - for me that was Lincoln county, TN. I told them hay making and goats. Whatever.

Basically, the TN tax exemption number provides state tax exemption from certain taxable purchases you make every day. I'm not gonna list them out because they're on the TN tax site. And plus it doesn't really matter: just have your tax exemption card ready and available when you make farm-type purchases, including Home Depot, TSC, Auto Zone, Oreilly's , your local Coop, tractor company, feed store, pet store, etc. etc. etc. They are all very familiar with the issue. You get it entered once and you're pretty much done for the year. Note: the current exemptions appeared to expire this last December 2015 and a new tax exemption card issued effective through Dec. 2019, so you have to have it entered again, no biggie.

For example, I go to TSC, Home Depot etc., tractor company and buy a bunch of stuff, doesn't matter what, dog food, lumber, fasteners, downspouts, tractor parts, so forth and so on. I get to checkout, I tell them I have a tax number, they ask for my phone number and any tax exemptable items automatically don't get taxed; the computer knows which is which (dog food isn't - crap!!!). You have to sign a digital form saying they are non-taxable and you're a good citizen, you don't swear or spit on the side walk (there might be some exaggeration therein). Whatever, sign it and go on with life. Easy Peasey.

No income tax in TN and you get to get some farm/tractor-type stuff non-taxable - life is good in TN!!!

Of course, the downside is the crappy views!!!!!

 

[12Bravo]

Ignore all the above. It's far simpler than that.

I have the TN tax exemption and have had it since Oct/Nov 2013 just after I closed on my property in TN. It's a simple form you fill out at your local county court house - for me that was Lincoln county, TN. I told them hay making and goats. Whatever.

Basically, the TN tax exemption number provides state tax exemption from certain taxable purchases you make every day. I'm not gonna list them out because they're on the TN tax site. And plus it doesn't really matter: just have your tax exemption card ready and available when you make farm-type purchases, including Home Depot, TSC, Auto Zone, Oreilly's , your local Coop, tractor company, feed store, pet store, etc. etc. etc. They are all very familiar with the issue. You get it entered once and you're pretty much done for the year. Note: the current exemptions appeared to expire this last December 2015 and a new tax exemption card issued effective through Dec. 2019, so you have to have it entered again, no biggie.

For example, I go to TSC, Home Depot etc., tractor company and buy a bunch of stuff, doesn't matter what, dog food, lumber, fasteners, downspouts, tractor parts, so forth and so on. I get to checkout, I tell them I have a tax number, they ask for my phone number and any tax exemptable items automatically don't get taxed; the computer knows which is which (dog food isn't - crap!!!). You have to sign a digital form saying they are non-taxable and you're a good citizen, you don't swear or spit on the side walk (there might be some exaggeration therein). Whatever, sign it and go on with life. Easy Peasey.

No income tax in TN and you get to get some farm/tractor-type stuff non-taxable - life is good in TN!!!

Of course, the downside is the crappy views!!!!!

View attachment 457528

What do you do about paperwork and tracking? In case of that audit?

How did you file your taxes since this is suppose to be for a business and for the sale of agriculture items?

 

[MF283]

If i'm not mistaken, you have to show where you've sold 1K a year as well, i stand to be corrected though.

Ronnie

 

[12Bravo]

If i'm not mistaken, you have to show where you've sold 1K a year as well, i stand to be corrected though.

Ronnie

Yes you are right, how? It is a cash business adventure. That's kind of what I am getting at, how does other people keep track of their sales when we are mostly cash business's.

 

[747driver]

Ignore all the above. It's far simpler than that.

I have the TN tax exemption and have had it since Oct/Nov 2013 just after I closed on my property in TN. It's a simple form you fill out at your local county court house - for me that was Lincoln county, TN. I told them hay making and goats. Whatever.

Basically, the TN tax exemption number provides state tax exemption from certain taxable purchases you make every day. I'm not gonna list them out because they're on the TN tax site. And plus it doesn't really matter: just have your tax exemption card ready and available when you make farm-type purchases, including Home Depot, TSC, Auto Zone, Oreilly's , your local Coop, tractor company, feed store, pet store, etc. etc. etc. They are all very familiar with the issue. You get it entered once and you're pretty much done for the year. Note: the current exemptions appeared to expire this last December 2015 and a new tax exemption card issued effective through Dec. 2019, so you have to have it entered again, no biggie.

For example, I go to TSC, Home Depot etc., tractor company and buy a bunch of stuff, doesn't matter what, dog food, lumber, fasteners, downspouts, tractor parts, so forth and so on. I get to checkout, I tell them I have a tax number, they ask for my phone number and any tax exemptable items automatically don't get taxed; the computer knows which is which (dog food isn't - crap!!!). You have to sign a digital form saying they are non-taxable and you're a good citizen, you don't swear or spit on the side walk (there might be some exaggeration therein). Whatever, sign it and go on with life. Easy Peasey.

No income tax in TN and you get to get some farm/tractor-type stuff non-taxable - life is good in TN!!!

Of course, the downside is the crappy views!!!!!

View attachment 457528

Great view !! We live in the Cherokee National Forest and are looking for more property with mountain views. Anyhow, thanks for the tax info, this is something we plan to do this year.

 

[jim44]

This is a real good question with interesting replies. We did ours on the basis of forestry, as our place is pretty much in a forest. About all I could find out about it is that you need to formulate a plan with the assistance of a forest service rep or someone in the logging industry. It is mostly an inventory of your forest, and recommendations for what to do to maintain it. Then you send an application to the tax department, and they approve it and you're good to go. About the only benefit for us has been a little reduction in property taxes. Nobody ever mentioned anything about keeping records or reporting anything to anybody..........