You’ve been granted free access to this subscribers only article.
Sales-tax exemption rules could change for Texas farmers/ranchers
By Gene Hall
For many years, Texas farmers and ranchers have received an exemption of the state sales tax on those items used to produce agricultural products. This is a very reasonable and appropriate state policy. In lean years, it can be the difference between staying in business or not. Despite the law’s popularity, there have been problems and those who believe they’ve been victimized by its administration are becoming increasingly vocal.
Currently, anyone who buys products for use in agricultural production only has to state that he or she is sales-tax exempt and fill out a form. When, however, that form arrives in the Texas Comptroller’s office and there is a problem, the seller of that product may be liable for the tax. Quite understandably, those that sell these kinds of products are objecting to that.
I have been told of situations where abuse has occurred. For example, a 4-wheeler, ostensibly for use in farm chores, was sold and the sales tax exempted. Later, when the justification was found lacking, the dealer had to pony up the sales tax. This is a substantial hit for any business, small or large.
There are all kinds of good reasons to continue this exemption for the benefit of those who farm and ranch and none for those who do not. House Bill (HB) 268 has been filed in the Texas Legislature to address this problem. The bill requires farmers and ranchers to secure a number that will prove their exempt status. It also would put some teeth into enforcement, with penalties for falsely claiming exempt status. The trick is to make the process seamless and easy for those who deserve it.
Texas Comptroller Susan Combs has provided a list of reasonable documentation her office will accept as proof of farm or ranch production. These include receipts for sales of livestock or crops, expense receipts for feed or other production items, a Farm Services Agency farm number, or a Natural Resources Conservation Service cooperator number.
Of course, an IRS Schedule F, reporting farm income, would do the trick, but there is understandable reluctance to provide personal income tax information to a state agency.
The voices complaining against fraudulent use of sales-tax exemptions are growing louder. At some point, these voices could threaten the continuation of the agricultural sales-tax exemption that is very important to Texas agriculture.
HB 268 seems very reasonable. It could be an idea whose time has come.
Gene Hall is the public relations director for the Texas Farm Bureau.
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
Agriculture Today Archives
Beef Cattle Management seminar (August 26, 2015)
Cotton root rot and its symptoms (August 26, 2015)
Feral hogs, water workshop (August 26, 2015)
Get acquainted with 4-H event (August 26, 2015)
Harvey places in top 20 (August 26, 2015)
Hay & Forage Report (August 26, 2015)
Livestock Market Reports (August 26, 2015)
Mobile app for hunting regs (August 26, 2015)
Registration for cattle conference (August 26, 2015)
Survey deadline (August 26, 2015)
Turkey fed to improve Texas grasslands (August 26, 2015)
Wilson County 4-H Council, Booster meetings, Sept. 2 (August 26, 2015)
Anthrax confirmed in equine in Uvalde County (August 19, 2015)
Deer association: Environmental group deceives deer industry, wildlife community (August 19, 2015)
Don’t miss your shot! Apply for drawn hunts (August 19, 2015)
Feral hog management workshop is Sept. 4 (August 19, 2015)
Hay & Forage Report (August 19, 2015)
Livestock Market Reports (August 19, 2015)
Prospects bright for dove season (August 19, 2015)
Saving tomatoes from the Texas heat (August 19, 2015)
Siblings make rodeo memories (August 19, 2015)
TDA Market Report (August 19, 2015)
Chagas disease in South Central Texas (August 12, 2015)
Eastern equine encephalitis cases reported in Texas (August 12, 2015)
Hay & Forage Report (August 12, 2015)
Leaf-dropping is common (August 12, 2015)
Livestock Market Reports (August 12, 2015)
New, stronger El Niño may bring another wet winter (August 12, 2015)
Pieniazek elected president of ag education leadership (August 12, 2015)
EPA ‘muddies’ Clean Water Act (August 5, 2015)
Hay & Forage Report (August 5, 2015)
It’s a ‘banner’ summer for Payton! (August 5, 2015)
Lantanas losing luster; mosquitoes a bother (August 5, 2015)
Livestock Market Reports (August 5, 2015)
Meuths receive Bronze Merit Award (August 5, 2015)
Shoot to benefit Don Newbury (August 5, 2015)
TDA Market Report (August 5, 2015)
August 2015 Gardening Calendar (August 1, 2015)