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Tractor Talk Discussion Forum

NC Farm Tax Excemption

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Ford Man

04-23-2007 09:19:13




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I am no farmer and don"t pretend to be but I have a question about farm tax excemption rules in North Carolina.

What do you have to do to qualify ?

I know someone who has about 25 acres with a couple of really nice houses on it and they are set up as farm tax excempt.All I have heard is how much money they save on building materials and equipment and so on.

They do not have any crops and they don"t lease the land to anyone to plant.

What they have done is plant pines on about three acres and are cutting the timber on another 7 acres and are going to set that out in pines.

Is that really enough to claim the excemption ?

Seems a little dicey to me.

What are the penalties if you are in the wrong ?

Any thoughts ?

Ford Man

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Walt Davies

04-23-2007 12:42:19




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 Re: NC Farm Tax Excemption in reply to Ford Man, 04-23-2007 09:19:13  
The only exemption that we get is on the Property tax and we can also get Farm license for the trucks we use. that saves us a bunch though. As far as the house being exempt it depends on when you built it. Mine was built in 1971 and is farm exempt so i pay under $600 on $550,000 farm.
Walt



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Bus Driver

04-23-2007 11:43:01




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 Re: NC Farm Tax Excemption in reply to Ford Man, 04-23-2007 09:19:13  
Unless they declare some farm income on the NC D-400 return, the Dept of Revenue WILL catch up with them. All those purchases are audited.



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Bus Driver

04-23-2007 15:01:56




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 Re: NC Farm Tax Excemption in reply to Bus Driver, 04-23-2007 11:43:01  
I read the original post again. NC Sales Tax on farm items is 1% for those who qualify. The Dept Of Revenue does audit sales records of merchants and compare them to individual tax returns. Property tax matters may vary with the county, 100 of them in NC. In my County, at least 10 acres must be used for active farming and those 10 (or more) are taxed at a valuation of $500.00 per acre. Any property with a house is valued for tax purposes at $20K per acre for the first acre and at market value for the remainder of the tract. The value of the house itself is added to that. Typical is about $3500 per acre. No way to afford to farm on land that costs that much- hay, corn or soybeans.

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Hard Knocks

04-23-2007 11:09:11




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 Re: NC Farm Tax Excemption in reply to Ford Man, 04-23-2007 09:19:13  
In Virginia you have to have $1500 in sales of something agricultural produced on that land to qualify and I think you have to file a schuldue F
with the IRS



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mjbrown

04-23-2007 09:49:16




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 Re: NC Farm Tax Excemption in reply to Ford Man, 04-23-2007 09:19:13  
I'm not from NC but it sounds like they are not who the law was intended to help. They may well be in compliance with the letter of the law. If they used the exemption to buy building materials for the homes they may be breaking the law. You should be able to get a copy of what is allowed from some branch of the NC government or your state representative's office.



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Noah W

04-23-2007 11:47:09




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 Re: NC Farm Tax Excemption in reply to mjbrown, 04-23-2007 09:49:16  
I live in NC. I had to get a farm tax exemption so I could buy off-road Diesel fuel for my JD450C loader. I also could no longer buy heating oil in bulk(whole lots cheaper than having it delivered) at the pump and then transfer it to my oil tank without the exemption. I currently don't do any farming, but I may in a couple of years. That exemption is good for all kinds of stuff wether you are producing crops, raising beef or chickens, or have a tree farm, which sounds like what they are doing. Go down to the local farm supply, ask for the farm exemption form, and send it in. You may or may not get a call from them depending upon how how clearly you state your reason for wanting the exemption.

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Ford Man

04-23-2007 13:56:52




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 Re: NC Farm Tax Excemption in reply to Noah W, 04-23-2007 11:47:09  
Sounds like you may have hit the nail on the head with the tree farm thing.

They set out about 3 acres a couple of years ago and are going to set out another 5-7 acres next year.

Thanks to all for the replies !

Ford Man



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