Michigan Tax Ag Exempt

[Greenthumb]

Does anyone know in michigan if you can count maple surging on your property as a tax exemption and buy equipment tax free. I was wondering if I can do that. The only ag use we have is the maple syrup. but my tractor is always used for sugar bush matiance. I bought a log splitter for example to split wood for the evaporator wondering if I could have saved some money on taxes or is just as easy to pay the taxes and not get into all the exempt ag use. Just wondering if anyone had a knowledge in this for the State of Michigan

Thanks

[WESTVIRGINIAMAPLER]

In WV, it is considered agriculture and I bought my tractor last year tax free and anything else I need related to maple, I buy it tax free. Saved me around $ 700 in sales tax on the tractor and the business license is free since it's agriculture.

[rschoo]

I looked into the same thing earlier this year and didn't find much on the mich.gov website. I don't know if in our state you have to own a minimum amount of property or what. If you find anything out please post and I will do the same.

[Parker]

Mabey your states Ag. Department could fill you in on the basics of the tax laws???

[digman_41]

Maple syrup production is considered an agricultural product in michigan. Even if it wasn't anything related to it would be considered a business expense and thus make all purchases related to the production tax deductible , that is if you sell your product. If you don't sell it you may want to consult your accountant or a tax attorney. Mark

[Mark]

I have spent alot of time on this suject.
Michigan will agree that sap collection is ag but there is no specific tax law so you would have to get them to write new tax law.
I have a 300 acre sugar bush with tubing corner to corner but could not get it changed to Ag. I would need an attorney and lots of money.
Boiling the sap down is manufacturing in Michigan and even with the IRS in all states.
I dare you to call the IRS and ask, but don't use you name! I see in one of the IRS handouts it states that the sugarhouse is not ag and the fuel burned is not farm fuel. Thats all states!
The tax people don't care what the department of Ag. calls it. It all comes down to specific tax law. And now they like to collect all the taxes they can.
It's best to just to lay low or they will charge you personal property tax on your equipment. For example a nice RO might cost you a couple grand a year.
The Michigan maple syrup association tried to take this subject up and gave up when they found out that if they were successful with only sap collection and got land listed as ag it wouldn't change anything. If land next to you is residental you will be taxed at that rate, at least thats what they said. And they felt that there was no way to get anything farther than sap collection. Another subject for later is the IRS hobby loss rule!

[rschoo]

Thanks for the post Mark. :?
I kind of had a feeling this was how things were. Any activity that's done as a small family buisiness and can't be profitably taken over by Monsanto or General Mills while forcing all the mom & pops out of buisiness will be squeezed by the IRS until it bleeds.

[super sappy]

The IRS Just milks people instead of cows.

[WESTVIRGINIAMAPLER]

I don't really care about the IRS tax thing as my business license is for Ag/farming. The reason for this is all the syrup stuff I buy is sales tax free. Don't save a lot, but 6% can add up, especially on the tractor last year. :D I report my income on my taxes as sales of product and not Ag, so I guess they will be happy if I am ever audited. :?

[digman_41]

It cost me $75.00 per year for a licence to sell syrup in Michigan. The license is issued by the Dept. of Agriculture. If syrup is not considered an agricultural product then the IRS should debate that with the Dept. of Agriculture. I'm sure the Dept. of licensing and regulations would love to collect another fee for an additional licence! And they wonder why people give up! Mark

[Jim Brown]

digman; As an FYi in Pa we need to make 1000 gallons before we are required to have a licence from th dept. of Ag. (cost is 35.00)
Thanks
Jim

[digman_41]

I had a comment to ad. As I was driving home from work one day I noticed the steam coming out of the neighbors grain drier. I had a thought that if corn in our area wasn't dried before storage it would spoil.
Much the same as sap would spoil if it wasn't reduced to syrup. So corn also would be considered a non-agricultural product once it was "processed" using by IRS logic! I really don't understand they're refusal to consider syrup production agricultural. Mark

[Fred Henderson]

New York state is tax exempt also. Anything that I have to have that is even remotely related to syrup making is on that list. Even gas & oil for the chain saw used to cut the wood,fuel for tractor,truck etc.

[WESTVIRGINIAMAPLER]

And anything even remotely related is good tax write off as long as it is related somewhat. As long as it assists in maple, I don't write of household things, just wouldn't be right. :)

[sbmaple]

Fred, did you file for a tax number as maple producer?I have a tax number for resale under another business i dont use it for maple related items but i've been some places that think i'm crazy when i tell im maple producer want to be tax exempt.maple equipment suppliers dont give you any hasle.Just wondering how you go about it?

[Fred Henderson]

sbmaple, No I do not have a tax number. The places that I do business have a form on file that I signed which says that what I am buying is used in the production of maple products.

[WESTVIRGINIAMAPLER]

In WV, you have to have a tax # and fill out a form 1 time and it is put on record and in the computer wherever you buy stuff at to get it tax free.