New Law May Hurt Area Farmers

A change in the state’s tax exemption laws may hurt some local farmers. In the past farmers could purchase inputs, which are one time use items, such as fertilizer, seeds and feed, essentials in farm production, without paying taxes on those items. The new regulations will remove those exemptions to smaller scale farmers. According to House Bill 1050, to qualify for the tax exemptions now farmers must make $10,000 or more in gross farm income from the preceding tax year or have an average annual gross income from the three preceding income tax years of $10,000. Mitchell County Cooperative Extension director Jeff Vance said that the new legislation will hurt a significant amount of farmers in the area where the majority of farms are small operations. All current agriculture exception certificate holders are to reapply based on the new changes and a conditional exemption is in place for beginning farmers who have no history of farm production. To receive the exemption farmers must certify that they intend to engage in farming and file timely state and federal income tax returns that reflect income and expenses incurred by the farming operation during the year. 

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