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OT: TX requiring tax payments despite tax exemption??

R

Ralph Bauer

Well-known Member
Just trying to figure something out: Live in OK, have tax exempt# from OK for many years. In the past, I ordered by mail tractor parts from a dealer in TX. Yesterday, on my way to LA, I stopped by in person at their place to buy heavy parts and to save the shipping cost. I was informed (with many apologies) that they had checked with other dealers (across colors)in the area and that since Jan 1, 2012, They too have to charge all taxes if one picks up and pays in person (OK ag excemtion not recognized)except on feed and not order by phone and ship it(any carrier) . Then, they WILL honor out-of-state tax excempt and not charge tax ....uhhhhh???
Went along with it, but an additional almost 50 bucks out of my pocket in March of a tax year is hurting a little (till filing taxes next year..)Also, I have bought chains, boomers, tools since Jan 1, 2012 at H.F. Tools in Wichita Falls, TX for farm use with OK exemption and they did not charge me taxes....
Any thoughts and wisdom is greatly appreciated. Thanks in advance! Ralph in OK.
 
yeah,its actually been like that for years...the farm exempt bs they came up with just added to the confusion...depending on tax due,you may come out cheaper having it delivered to OK...i been ordering my farm chemicals online because the braniacs in Austin wont let me buy them without paying a fee for a scrap of paper that says i know how to use them...dont pay any tax either hehehehe
 
There are a lot of misunderstanding about tax exemption. Texas law says sales tax exemption only applies to goods directly related to your primary income crop. The law gives an example: if you primary crop is cattle and you house horses that you ride for pleasure in the same barn with the cattle and you re-roof the barn, only the portion of the roof covering the cattle is tax exempt. Most people who profess to be farmers in this day and time make their primary income working for a corporation thus they are not entitled to any exemption. I noticed on this WEB site the other day someone thought their home maintenance was exempt. No not unless mine is and I don't have a farm.
 
(quoted from post at 23:59:14 03/23/12) There are a lot of misunderstanding about tax exemption. Texas law says sales tax exemption only applies to goods directly related to your primary income crop. The law gives an example: if you primary crop is cattle and you house horses that you ride for pleasure in the same barn with the cattle and you re-roof the barn, only the portion of the roof covering the cattle is tax exempt. Most people who profess to be farmers in this day and time make their primary income working for a corporation thus they are not entitled to any exemption. I noticed on this WEB site the other day someone thought their home maintenance was exempt. No not unless mine is and I don't have a farm.
Click to expand...
nd your comments apply just how to Ralph's situation?? :roll:
 
To get a Texas Agricultural Sales Tax Exemption you have to farm in Texas. Otherwise, if you buy at the store, you pay the tax based on the store location. HF Tools should have charged you tax. Find yourself a friend who lives and farms in Texas.
 

I once bought two trucks across the state line in Taxachusetts. The dealer delivered them to me at my yard so that I wouldn't have to pay the MA sales tax.
 
Most states are like that, this is why paypal is telling the IRS who is buying and selling what. Old Ebay no one could keep tract of it. There are ways around it, but with the price of gas, shipping evens out nowdays. It 'might' have been legal for them to load you up there, and just send the invoice to your home, but then again, maybe that ain't legal.
Nothing new going on here, this was one of the major reasons for the war between the states- 'tariffs on interstate trade'.
 
With the invention of cell phones you can call in an order from their parking lot, and pay over the phone just like your calling from home. Once the order is taken, and paid for by credit card, tell them you'll be by shortly to pick it up......Then get out of the truck and go in to pick up your order....... In a case like that, as far as their records are concerned, your order was placed, processed, and handled just like any of your other orders so their a$$es are covered when it comes to the tax situation...and you still save on the shipping.
 
This is part of a new thing. Starting Jan 1 everyone who had need of an ag exemption had to get an actual ID number from the state. Previously you just had to have on file with the retailer a piece of paper saying you used such and such for farm use.

They're tightening up after years of abuse.

Technically HF should have charge the sales tax. Somehow I get the feeling that HF does not perhaps have the greatest training programs for employees. Oh well!
 
A tax exempt # from one state (OK) is really no good in another state (TX). You need to be exempt under the laws of the state (TX) you are buying the product in.

When you order something over the phone and have it shipped to your state you are suppose to send the tax due into your states office because the product is taxed in the state where you took possession of the product. You are exempt in OK so you do not send in anything. If you travel to the other state and take possession of the product there you will be taxed under that states laws.

Here in La we have a line on our state tax form that ask if we bought anything from out of state because the tax is due to La.
 
I've been a Texas dealer for 26 years and it's always been that way. Anything I have a bill of lading to where I can prove it was shipped out of state is exempt from tax. Anything personally picked up is subject to tax. There is something new about agricultural exemptions. I believe as of Jan 1, 2012 they have gotten more picky about farm use exemptions. Where before you could just sign a paper saying you had a farm, now you have to prove you are producing an agricultural product. I believe you have to produce a federal ID number for the farm to get the exemption. It sounds like HF screwed up and when the comptroller catches up with them will be liable for the tax.
 
(quoted from post at 00:46:19 03/24/12) I've been a Texas dealer for 26 years and it's always been that way. Anything I have a bill of lading to where I can prove it was shipped out of state is exempt from tax. Anything personally picked up is subject to tax. There is something new about agricultural exemptions. I believe as of Jan 1, 2012 they have gotten more picky about farm use exemptions. Where before you could just sign a paper saying you had a farm, now you have to prove you are producing an agricultural product. I believe you have to produce a federal ID number for the farm to get the exemption. It sounds like HF screwed up and when the comptroller catches up with them will be liable for the tax.
Click to expand...
othing federal about it. You just apply to the state of Texas, they send you your number/card & you present it at the store you are buying from the first time & after that they have it on record and all is well. BTDT
 
HF has stores in Texas and therefore is required to charge TX. state sales tax (6.25%) for any product you buy from them regardless of where it is. If it is for farm use and you have the permit, you don't pay the tax.

If a business does not do brick and mortar business in TX. they don't tax you and nobody comes knocking at your door to collect it. Seems when you buy something mail order there is a comment something like: Minnesota residents add xxx sales tax, because the company selling the product is based there.

On the new ID, it is no big deal. I had a diesel farm tax id number and getting my new number, that local merchants would honor took filling out the application, sent it off to Austin and about 2 weeks wait. No big deal. I'm sure my diesel no. sped the process.

Mark
 
(quoted from post at 10:07:02 03/24/12)
On the new ID, it is no big deal. I had a diesel farm tax id number and getting my new number, that local merchants would honor took filling out the application, sent it off to Austin and about 2 weeks wait. No big deal. I'm sure my diesel no. sped the process.Mark
Click to expand...

I filled my application for Texas state tax ID # online and had a tax number in about 2 hours.
 
The issue is where the product changed hands/ownership. Here you pay the tax where it changes ownership. Here in Iowa I used to sell lawn mowers into Wisconsin. If they picked it up at the dealership then we had to charge them Iowa sells tax. If we delivered it to Wisconsin then we did not have to. They where supposed to pay the Wisconsin sales tax themselves.

When you pick it up in Texas you had to pay the sales tax. When they shipped it to you you did not.

As the states had their budgets get tight they are looking to collect all of the taxes they can. I bought a tractor in Mississippi this last fall. There they charge sales tax on farm equipment. I had to send them a copy of my Iowa sales tax exemption for retail sales or I would have had to pay the tax if I was just a farmer. It would have been $600 on that tractor.
 
Wayne, I thought about doing it the next time the way you talked about it. Maybe a little more time between the call and pick-up ...lol
 
Mark, but I do not have a farm in TX, just in OK and an OK exemption, I seriously doubt that they will let me have a TX ag exempt # with an OK farm only. As far as HF is concerned, I just have to buy all here in OK....went down there because they were out of stock on several sales items here in OK, but had them in W.F, TX. and the ad was about to expire...
 
John, we have that here too in OK since 1-1-11, I believe. When I order shirts from Land's End, I have to pay taxes since L.E. does/did not collect them last year.
 
I file taxes under my own name (thru TY2010), not sure what my accountant will tell me this year, same with a non-farm related LLC, same with any other income of mine and my wife. I will look into the federal ID deal, maybe even creating another LLC (sigh).....
I am supposed to pick up a GN trailer, made in TX by Load Trail, bought through a TX independent dealer in the very near future.... I better make sure he hauls it across the line, don't want to pay taxes in TX on it...
 
But you live/farm in TX, right?? I don't do either, just buy tractor parts! Surely, they won't give me that TX ag exempt id #.....?!!!!
 
Sad deal, feel for folks that for example live in the OK panhandle.... or west VA.... and so many other places.....will bring that to Frank Lucas' attention, our House rep in DC, is chair or vice chair on ag committee...!!
 
(quoted from post at 22:33:26 03/25/12) I file taxes under my own name (thru TY2010), not sure what my accountant will tell me this year, same with a non-farm related LLC, same with any other income of mine and my wife. I will look into the federal ID deal, maybe even creating another LLC (sigh).....
I am supposed to pick up a GN trailer, made in TX by Load Trail, bought through a TX independent dealer in the very near future.... I better make sure he hauls it across the line, don't want to pay taxes in TX on it...
Click to expand...

Ralph
I just looked at the tax form and I applied for my ag tax exemption in just my name no company or LLC. Why not go oline and fill out the Tx Ag application, all they could do is issue one or turn you down. On the trailer I think all you'll receive is a statement of origin(manufacturer's title). To get a real title and pay any taxes due will have to be done in Oklahoma.
 
Jim, yes, I double checked, you are right, statement of origin on the trailer; will go online and see if they will issue one to me or not... will keep you posted. Thanks, Ralph.
 

Texas:
Who is eligible for a registration number?

A person, including a non-Texas resident, engaged in the production of agricultural or timber products for sale in the regular course of business is eligible for a registration number that can be used to claim an exemption from Texas sales tax on the purchase of qualifying items included for eligibility for registration numbers are persons in these groups:

farmers and ranchers who raise agricultural products to sell to others
persons engaged in aquaculture and apiculture; (i.e. commercial fish farms or bee keepers)
custom harvesters;
persons engaged in agricultural aircraft operations, as defined by 14 C.F.R. Section 137.3 (crop dusting);
commercial nurseries engaged in fostering growth of plants for sale (i.e., growing stock from seed or cuttings, replanting seedlings in larger containers); and,
timber producers, including contract lumberjacks.

Who is NOT eligible for a registration number?

A person who is not engaged in the production of agricultural or timber products for sale is not eligible for a registration number and may not claim an exemption from tax when purchasing the items noted above. Examples of the types of activities that do not qualify for exemption include home gardening; horse racing; florists or similar retailers who only store or maintain plants prior to sale; wildlife management and/or land conservation; maintenance or operation of hunting and fishing leases; horse boarding; trail rides; commercial fishing; dog breeding and pet kennels.
 

JMOR
As I earlier stated I filled out the tax # application form online and had my number shortly afterward. Then I filled out some exemption forms online for each retailer that I do business with that contains all the pertinent info with my tax number.. I printed out & signed the form then just present the form to the retailer.
 
Thanks again, everyone, especially Tx Jim and JMOR, got my Ag tax exempt # just a few minutes ago online.
Ralph in Oklahoma.
 
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