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In which states do you have to pay sales tax on farm eq.??

J

JD Seller

Well-known Member
I am looking at a tractor that is on a dealers lot in Mississippi. The salesman is telling me that I will have to pay sales tax on this tractor unless I have resale tax exempt number. He said even though I lived outside of Mississippi I still had to pay the tax.

I do have a resale tax number as I have to charge sales tax here in Iowa on all lawn an garden transactions and the labor on farm equipment repairs.

Paying sales tax on farm equipment kind of surprised me. Iowa used to charge sales tax on farm equipment but that was dropped in the 1970s if I remember correctly.

The sales tax would add about $1500 to the cost of the tractor. I would think this would be a big disadvantage to selling large equipment across state lines.
 
I buy quite a bit of equipment and other farm related items in Mississippi and as a non resident I am not charged sales tax if the item is ""shipped"" out of the state, in other words, the ""buyer"" cannot pick the tractor up but can either have the dealer deliver the tractor across state lines or hire his own transport, I simply take one of my sons with me and he pulls the trailer with his truck so my son is my ""shipper"" meaning I am not picking the tractor up myself as the buyer, this is a common scenario and I have done this several times in Mississippi and Alabama. The dealer you are talking to should know that if you arrange shipping you are tax exempt in Mississippi. A Louisiana resident who has signed the tax exempt forms will not be charged the states portion of sales tax but will still have to pay the sales tax rate of the parish in which they reside, livestock feed is fully tax exempt if the buyer is signed up.
 
Wouldn't your farm tax exempt number be the equivalent? The places that know you don't worry about it, but if I go to a chain store here they put me in the system with the tax exempt number issued to the farm. Anything related to parts or equipment (as well as feed or animal related) is tax exempt here in Kansas. Most don't want my id number, just a signature on their paperwork.
 
If the seller ships the tractor to you out of state it is exempt and you would then settle up with your state.
If you pick it up or arrange shipping it is taxed.

http://www.dor.ms.gov/taxareas/sales/salestaxfaqs.html

What are export sales and are they subject to Mississippi sales tax?
Export sales are sales made to customers located outside the state of Mississippi. They are not subject to Mississippi sales tax if the seller is required, as a condition of the sale, to ship or deliver the property to a location outside this state. If the goods are picked up or otherwise received by the customer in Mississippi, the sale is subject to Mississippi sales tax.

What types of farm machinery are exempt from sales tax?
Farm machinery and equipment are not exempt; however, the law provides for a reduced rate of tax on the purchase of farm tractors and farm implements. Farm tractors are subject to a reduced 1% rate of tax and farm implements are subject to a reduced 3% rate of tax.
 
I would have the tractor shipped to me here. I have several local long haul flat bed guys that are very reasonable.

The dealership said that my tax number would work. The issue would be that most people do not have a tax resale number here in Iowa. You do not have to had one if your just a farmer. You need to be selling products that are subject to sales tax and are actually collecting the sales tax for the state.

I will be able to work around the sales tax with my resale number but there being sales tax on the equipment purchase just kind of surprised me.
 
As mentioned below I have bought many pieces of equipment in Mississippi and never pay any sales tax as a Louisana resident, the actual wording of the provison below has always allowed me to arrange my own shipping, though I have provided the seller a copy of the shipping invoice on more than one occasion. Even if a seller thought they needed to be a stickler they could simply charge you for the shipper of your choice and pay that shipper for you, I have done it that way a time or two out of Oklahoma.

''There is no sales tax due when the seller is required, as a condition of the sale, to ship or deliver the product directly out-of-state or out of the country. A copy of the sales slip and shipping invoice will need to be retained showing that sale was shipped directly out-of-state or out of the country.''
 
Oklahoma has sales tax on all farm equipment. There is a simple way to register your land as farm use and get a tax exempt status/number though. There is also a tax exempt status you can get for business/resale side too.

Sales tax on smaller tractors (30-90hp) can easily be $1000-4000+ with an 8.5% rate.
 
In Louisiana you have to have a tax number to make certain purchases and or to buy wholesale, I have three numbers and buy for my own use without tax applying as long as it is bulk livestock feed and vet supplies.
 
In Iowa you do not have a "farm exempt number" .
You have to fill out a exception form with each retailer.

I only have a sales tax number because I do repair work that requires sales tax to be charged. If I where just buying/selling farm equipment I do not need any type of sales tax number.
 
JD Seller, why are you looking at a tractor out of Mississippi anyway? Surely anything they have you can find twice as many of where your at, if it is a row crop tractor coming out of the delta it was more than likely driven by any and all.
 
In California you have to sign an affidavit stating you are using the tractor for making profit (money growing crops for example) and not for other purposes. Otherwise you pay tax.
 
LAA I have been buying tractors out of the south for years. If I am going to go through one I mays well get one cheaper to start with. The tractors in the Midwest sell for 20-30% more than similar tractors in the south.

This particular tractor is a JD 4250 open station tractor. It is flat top fenders, no cab or roll guard cab. I am looking for one for a feeder wagon tractor. Your on and off so many times that a cab is in the way.
 
Believe it or not, here in the land of taxes, (NY) you simply sign a form which states something to the effect that the item will be used at least 50% in production agriculture.
I am surprised how many times I have been asked for my "number". Farmers never had a number here.

I do most of my business with regular suppliers, who are supposed to keep the forms on file. Pretty much, without question, items are charged to my account tax free.
 
Yeah, a tractor like a 4250 would still be 30k or better where I live, there are not many mid 80's tractors in our area, nobody was making much money. Kind of jumps from 4020's and 4320's from the 70's to the 55 series in the late 80s and early 90's and there are a slew of them.
 
None in Missouri. Even on most all farm supplies. Now if I go in a farm and home store and the item I am buying is something that can be used for home or personal use, then you have to pay tax on that.

Lets say Antifreeze. Since it can be used in Mammas SUV, you have to pay tax. But if I buy an electric fencer, disk blades, or a hydraulic cylinder, there is no tax on those items. You generally have to fill out a form, or already have one on file with the store. At Orschlens they just look my name up, verify I am signed up, then no tax on farm items.

Gene
 
JD Some young salesman that does not know his A.. from a hole in the ground. Mississippi if you are moving the unit out of the state and send a commercial carrier in there for it he uses the bill of lading stating the unit was shipped out of state for exemption when they file their sales tax. IF YOU go in person and pick it up there is a form that you certify that you are moving it from the state. However if you gave him your resale number chances are it would never follow you back to your state tax folks. He would have to get a state audit and then the auditor usually just looks , very rare for them to follow up and send your state a copy of the invoice.
 
No state sales tax (4%) on farm equipment or repairs to same. No tax on parts. If your business is inside city limits city sales rax applies.. Maybe that's why all the ag companies are on the highway out west of town?
 
Folks up north will not believe me when I tell them like you stated there tractors are 30% cheaper down here.
 
IF you have a Tennessee Farm exemption number and you are paying sales tax on fencing supplies you are getting ripped off. Fencing is exempt under Tennessee law.
 
Not in Michigan. I saw an ad recently for a corn head for sale and the seller said he would charge sales tax UNLESS you were out of state having it shipped. I believe it was in Wisconsin. I didn't see why I couldn't arrange that purchase and then show up and say I was the trucker.
 
Not in Arkansas but nearly everything else has a sales tax, even diesel. There is no tax on feed, fertilizer and chemicals. I go to Missouri for fencing supplies, gates and so forth.
 
Bob is right about New York sales tax. Just print the form ST-125 off the New York state tax site. I carry a few forms in my glove box. Places like Tractor Supply,BJs,etc I use my phone number for the Id number.
 
In Maryland, and, I believe, in Pennsyltucky, production farmers are exempt from state taxes on machinery and most inputs. There does have to be an exemption form on file with the retailer, but it's not a big deal to fill it out and sign it.
 
Deere seller be carful this may be a scam!!!! He collects sales tax from out of state sale and pockets it and does not pay it to his state!!!!! Seen this before!!!!
 
Luckily I got out of MD before dying, so I don"t know about that. They do generate 300 million of revenue via a rainfall tax, based on the amount of impervious surfaces on your property.
 
I agree that it could be a scam, every year some car dealers get convicted for not passing on the sales tax they collected on in-state sales.

You could threaten to turn him in, but parts could then be missing when it's delivered. I'd be prepared to walk away unless it's something I really wanted. The tax might still be small compared to the transportation costs.
 
(quoted from post at 11:12:02 09/07/14) I am looking at a tractor that is on a dealers lot in Mississippi. The salesman is telling me that I will have to pay sales tax on this tractor unless I have resale tax exempt number. He said even though I lived outside of Mississippi I still had to pay the tax.
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Click to expand...

[b:d67192a6d0]What are export sales and are they subject to Mississippi sales tax?[/b:d67192a6d0]
Export sales are sales made to customers located outside the state of Mississippi. They are not subject to Mississippi sales tax if the seller is required, as a condition of the sale, to ship or deliver the property to a location outside this state. If the goods are picked up or otherwise received by the customer in Mississippi, the sale is subject to Mississippi sales tax.

http://www.dor.ms.gov/taxareas/sales/salestaxfaqs.html#export
 
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