North Carolina farmers will see a tax break this year on the purchase of certain farm equipment and supplies thanks to changes in the state tax law made by the General Assembly during its 2005 session.
“Though small, this tax break is welcome news to farming operations because of the rising cost of fuel, feed and other agricultural supplies,” said Agriculture Commissioner Steve Troxler. “Small farms are small businesses, and they are important to the economy of the state and the communities where they are located. I appreciate the General Assembly providing this tax relief.”
The following items that were taxed at a rate of 1 percent, will now be exempt from sales and use tax:
• Farm machinery, attachments, repair parts and lubricants applied to farm machinery sold to farmers.
• Containers sold to farmers to be used for planting, cultivating, harvesting, curing, packaging or transporting farm products for sale.
• Metal flues for use in curing tobacco.
• Bulk tobacco barn or rack, parts and accessories attached to the barn or rack.
• Grain, feed or soybean storage facility.
• Sales of horses or mules to farmers for use in planting, cultivating, harvesting or curing farm crops or in the production of dairy products, eggs or animals.
• Sales of fuel other than electricity to a farmer for use in planting, cultivating, harvesting or curing farm crops or in the production of dairy products, eggs or animals.
• Sales of semen purchased for use on animals held or produced for commercial purposes.
• Sales of potting soil sold to a farmer for use in planting, cultivating, harvesting or curing farm crops, or in the production of dairy products, eggs or animals.
Eligible farmers should complete and submit Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption, to vendors in order to document that the property being purchased is exempt from sales and use tax.
Farmers needing to obtain an exemption number should complete and submit Form E-595EA. Both forms are available online at www.dor.state.nc.us/downloads/sales.html or by calling toll-free at (877) 252-3052. Vendors who have exemption certificates on file from customers prior to Jan. 1, 2006, are not required to obtain new certificates from customers.
For more information, contact the North Carolina Department of Revenue toll free at (877) 252-3052.