Farmers may be exempt in states like mine, but the rules get grey and fuzzy as the states like mine reach out for more and more tax revenue.
Auctions have different rules if it is an estate auction on the farm, or a consignment auction of multiple parties; one most stuff is exempt, other only the large farm implements are exempt.
Parts that can be used on non farm stuff are not exempt, farm parts that only fit on farm stuff is exempt. The state defines things differently than you or I would, lot of grey area. My farm store has to charge tax on electric fencers, because some people use them to keep deer out of a garden. Not a ‘farm use’ so then all the sales get taxed.
And so, these resale’s need very expensive software that sorts out all the different taxes from different states, counties, townships and what tax might apply to what item. That software needs updating every month as some govt agency wil come up with new rules that often. Generally the software costs more than the taxes do to keep updated!
My farm address is in a different county than my actual farm is; my postal address actually covers 3 different counties and many townships. Until recently the 911 addressing hadn’t been implemented well enough to indicate which actual county of the 3 my farm was in, so they had to have their own database to sort out from my address where I actually was located.
Then most states like mine need paperwork from each and every farmer now that states the individual is farming. And each state has slightly different piece of paper to sign and wants to collect your social security number for this. (Most allow a drivers license instead for security reasons....)
It is, basically, a very expensive paperwork nightmare for any Ag retailer. It pushes a terrible amount of paperwork or buy into a terrible expensive software solution.
All so these high taxing states can get their pound of flesh.
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