The business side of this

[Jeff E]

I know, I should talk to a tax professional, accountant and insurance agent, but they all want a piece of me, where you all are on my side...so I'll ask for your opinions first on this...

My maple business is set up as a sole proprietorship, and is part of my jointly filed personal tax. Any profit is counted as income. I sell 90% of my syrup bulk.

Do I need to charge/pay sales tax?

another question, what are most of you with over $50K invested in this doing for insurance, and what are you paying for it.

Thanks for helping a brother out.

[Russ]

There is no sales tax on maple syrup (or honey) in Wisconsin.

When buying equipment for your operation, you should be able to get the (Wisconsin) sales tax waived since it is for agricultural purposes. Sometimes you have to plead your case, as things like black mainline are considered a plumbing product. Fleet Farm will usually take you on your word if you stand firm. Every $ saved is another $ in your pocket.

[maplecrest]

with your tax adviser you can set up a depreciation format for your equipment.like my r/o will be a tax credit for 5 years, vac pumps, tanks ect. tubing and main line is a one time one year thing to write off. so upgrading tubing can pay in the long run. as for insurance. you need to carry some liability.being a bulk producer you will get all the tax info from the buyers with makes tax time easier. than keeping retail records.ever one wants a piece but better to be safe than sorry.good article about this in the latest 'farming' mag. by proctor researcher tim wilmot www.farmingmagazine.com

[OGDENS SUGAR BUSH]

TSC doesnt charge tax all you have to do is sign the bill tax exempt

RICH

[markcasper]

As was posted before, there is no sales tax on maple syrup. If your selling maple sugar, do not ever sell it as maple sugar "candy". Then there is suppossed to be sales tax.
Deduct all that is possible, but I disagree with Fleet Farm not charging sales tax. I have never been able to buy black poly tax free. They have a list of exempt items and thats that, black poly is not one.

Whats really funny, I pay no tax on SOS type scouring pads from the dairy section (they are twice as big), but you will pay tax if you pick up the idenical same thing and it says "Mr. Clean" on it.

As for insurance,,I have none on my equipment. I try to have assurance, not insurance. That might change with additional equipment however.

[WESTVIRGINIAMAPLER]

I carry 500,000 in liability on premises and the same for product liability. I have 15,000 on my Kubota tractor, 40,000 on my building and 15,000 on equipment and contents.

In WV, maple is considered Ag as it should be and as long as I sell it retail as the producer, I don't have to charge sales tax. Wholesale never gets sales tax anyways as it is up to the next guy who retails it to worry about that.

If you want some more info on insurance, shoot me a PM as I have worked in the claims end of insurance for 12 years.

[brookledge]

I carry liability ins. and also a ryder that covers any claims at my sugarhouse because it is on my parents property and not mine
Keith

[WESTVIRGINIAMAPLER]

I would think if you are wholesaling 100% of your syrup, product liability would not be nearly as important vs retailing it.

[PATheron]

Jeff- I was kind of worried about the insurance too. I went to my insurance agent and they checked into it for me and it turned out to be a good deal. They sent a guy out and took pics of everything and I told them what stuff cost and Im covered for all the stuff at the sugarhouse and also have liability for everything thats related to like the lines on others property etc. It cost me some money Id have to look but they lowered it soon after I got it actually. Its less than a 1000$ a year I can check what it is exactly. Plus product liablility etc. Its worth it to me for peace of mind and I really have quite a lot of money into everything and Id hate to lose it. I can pm you the outfit and better details if you want. I feel its a good deal. Theron

[gmcooper]

We had to change insurance companies last spring. Found out our old policy really didn't cover much of anything. New policy was only pennies more but covered so much more and a million liability. Our new policy is with American Reliable Insurance Company out of Nebraska. Our local agent called to be sure they would cover the maple and they did already have a number of maple producers covered and apprently some were very large.
AS for a business we do run the maple as part of our farming business and taxes filed accordingly.
Mark

[OneLegJohn]

This question is more for the insurance whizkids. I understand the coverage on equipment in case of fire damage or a lightning strike. However, the product liability is the part I think the insurance industry is making a killing. Has anyone ever died or gotten sick from bad syrup? No. I suppose you could choke on maple candy, have a suicidal diabetic show up, or accidentally get drunk on fermented syrup. Seriously, though, the product has very little risk. C'mon, even my plastic jug says the mold is harmless!

I think I pay $700/year for equipment and product liability because it is consumed by the public. I'm not complaining about the need for the actual expense. It is the cost of doing business. I'm just frustrated with the lack of understanding from the insurance industry. You'ns would think I was buying raw material from china that had potential for lead contamination. My trees might turn on me and send me arsenic.

I learned from a business professor, who happended to be a lawyer, "if you are determined to be completely risk-free when conducting business, you will never complete a transaction."

[DrTimPerkins]

However, the product liability is the part I think the insurance industry is making a killing. Has anyone ever died or gotten sick from bad syrup?

Could there be instances of mouse or bat droppings, or even a mouse in a jug. How about a bit of broken glass? Lead contamination? Maybe someone who doesn't know better uses peanut oil (an allergen) as a defoamer. Perhaps some cleaner accidentally contaminates the syrup. Lots of other possible scenarios.

Like any food product, maple syrup does have certain risks and therefore some liability. The liability is not terribly high compared to some other foods, however it is real. As you suggest, lack of knowledge about the maple industry by the insurance carrier can result in higher cost. Best to use an insurance company that has some knowledge and experience in maple.

[red maples]

that is very true. Dr. I think my ins co. is Maine Mutual which just started Ag ins. 2 years ago and they had no problem insuring me. I pay $500 for everything, which like I said before $1-2 mil policy and that includes my equipment, sugarhouse etc. Although not tubing in the woods though. I am also covered if a guest comes onto my property and gets injured as well.

[shane hickey]

Thats simualer to what I have, But I have few friends that help I have to pay them, at the end of the season I unfortantly have to give them a 10-99 So I can use it as a tax write off. The bigger you are in syrup production like anything else there's more money to be made behind the desk then the actual work.
shane

[Bucket Head]

Guy's,

Any idea how much a product liability only policy, if there is such a thing, would cost? Many folks produce syrup and sell some of it, but do not have a sugarhouse, visitors on property, thousands of dollars in equipment, etc. If that is an option I would assume it would be far less than a policy covering the syrup, equipment, visitors, building(s), etc. A smaller and less expensive policy would be easier for the smaller producer to afford and might help to encourage them to get one for their product.

Steve

[shane hickey]

Steve another thing that you have to take in consideration, the producer that sells syrup such as flea markets and stores, these falcilitys have to be inspected by a health inspector before you can sell to the public, I am sure that all states are the same as far as inpections. If the inspector turns you down and you still sell syrup, You can get a h@ll of a big fine. In michigan theres no liability insurance, I have a 1mil liability plus set up a llc. Which most of the producer do before they sell.
shane

[dnap63]

I don't know what it is like in other places but if you want to sell at any of the farmers markets around our area you must have a minimum of a one million dollar liability policy.

[shane hickey]

I am sure every state is different, most of the producer that are in are syrup assoiation dont hane any insurance, It's pretty pricing in Michigan, but all of them have to be inspected by the health insector. They also have to keep permint poseted on the wall showing they are a licesed producer. Also the inspector can show up perodiculy, so everthing needs to be spotless.
shane

[Bucket Head]

Shane,

I'm familiar the rules and regulations for syrup. Your right, there's a lot to it. My question is how much would those "little producers" expect to pay for a small policy covering them if they sell at flea markets, craft shows, community events, etc. This question should be directed to an insurance agent or someone who might have a policy like this, if they exist. Not everyone sells from, or makes enough syrup to sell from, say a store, or gift shop, their sugarhouse or a website/mail-order type business. If they don't have a sugarhouse and a lot of equipment, I'm thinking it would'nt benefit them to have to pay the "full shot" for the bigger policy.

Anybody out there with a smaller, inexpensive policy covering just the product liability? If so, how much is the premium? Any insurance salesmen on here?

Steve

[red maples]

I asked our regional Ag inspector about that for NH and she said that sugarhouses need not be inspected by the health dept. Liability ins for farmers markets yes I think the min. is $1 mil but I don't know for sure. There was a an issue a few years ago with the health dept wanting to inspect sugarhouses but it was fought and rejected, I don't know much about it really.

Steve as far as prices for liability ins only which I believe is avail. the best thing to do is contact an ins agent it usually doesn't cost anything to get a quote. I f I am not mistaken they get a commission from the ins company.

[dnap63]

Our liability insurance is actually a part of a farm policy which covers everything from our house to all equipment and can even cover animals, it all depends on what you want to cover and how much you are willing to pay. The actual cost of the liability part is pretty low( I would have to get out the policy and check for the axact amount) Our previous insurance co.9State Farm) told us that they would not cover maple, so we had to find a new company (Farm Family insurance) The bottom line is that the cost for our over al insurance didn't go up more than a hundred dollars or so a year and we have coverage for our maple business, eggs and what other farm products we may sell.