How many of you who claim income off the farm also have a business license?

[Wayne02]

How many of you who claim income off a small farming operation also have a business license for said operation?

Just curious as I noticed there are very small "family farms" around here that claim income off farming operations and just go with the straight schedule F (I think it is), then there are other very small family farms around here that also claim income (and occasionally "profit") off farming operations but they have pulled a business license for their operations.

Just wondering if there is any benefit to pulling a business license in these situations over just doing the small farming deal that does not require a license (may vary depending on location)?

Lets say you were in a situation where you needed to show X amount of "income" 2 out of every 5 years to the county in order to maintain the ag exempt tax status on a piece of property. Yet you also think that the possibility exists to show a "profit" for at least 2 of the 5 years with some more work...

Benefits/Drawbacks of operating it as a "business" vs. operating it as a "family farm"? Yes, I know the rules and regulations will vary depending on location.

[Ken Scharabok]

I essentially operate as three separate entities.

I am a retired federal civil servant and thus that is normally my primary income source.

I have a farm and that goes on Schedule F. I have a farm exemption for some state sales taxes.

I have an active eBay business and it goes on another schedule (C?). I have a TN use/sale exemption from most state sales taxes.

Net farm losses (on paper) largely offset eBay net income (real) so it's back to my retirement check for the most part.

I have a separate checking account for my personal/farm (combined) and my eBay business.

[texican]

I had one back in the 90's... it was such a headache it wasn't worth it. And then found out the hard way phone calls mean zilch... I was working in AK and got an overdue taxes letter from the State... even though I had no sales of anything, I still had to pay a 100$ fine... I got home, and cancelled the permit... to "bleep" with the govt. Underground is better. Since I have little to no excess taxable income, I don't need 'losses' to offset anything... If something is losing money here, it's written off. That enterprise ceases to exist.

[SilverVista]

I believe it depends on who your targeted market is. If you farm alone and deliver row crops to the cannery, or livestock to the feedlot buyer, then you don't need a business license and there's no benefit in having one. However, if you advertise and sell to the general public, or sell out of state, or if you have employees, then you do need the business license and federal tax ID. Oregon has no sales tax, so it's a slightly different situation for me -- but in general a business license is considered proof that you are eligible to buy products at wholesale as input for your operation.

[michiganfarmer]

I have a couple. one for maple syrup, and a corporation for my sharpening, and power tool repair business.

[ET1 SS]

Originally Posted by Wayne02

How many of you who claim income off a small farming operation also have a business license for said operation?

I do not.

... Just wondering if there is any benefit to pulling a business license in these situations over just doing the small farming deal that does not require a license (may vary depending on location)?

I can not imagine what benefit you would derive.

... Lets say you were in a situation where you needed to show X amount of "income" 2 out of every 5 years to the county in order to maintain the ag exempt tax status on a piece of property. Yet you also think that the possibility exists to show a "profit" for at least 2 of the 5 years with some more work...

Fortunately the IRS does not 'require' any such "2 out of every 5 year" thing.

Choose your county, choose the frame-work within which you must comply.

... Benefits/Drawbacks of operating it as a "business" vs. operating it as a "family farm"? Yes, I know the rules and regulations will vary depending on location.

I file a schedule 'C', a schedule 'E' and a schedule 'F'; every year.

The benefits? Well primarily sheltering.

[MaineFarmMom]

Maine doesn't issue business licenses. It's done on the town/city level. Some towns require dba's and have zoning requirements to meet, mine doesn't require anything.

I have a state sales tax number, required by all businesses. I have issues with this because I resent keeping track of the state's sales tax money I collect, the paperwork I am required to keep, the time it takes to fill out reports and submit the tax money I've collected without being compensated for my time. So, I don't sell anything that requires sales tax. Screw 'em. The tax number allows me to buy some supplies without paying Maine sales tax if I needed to. My sales tax report is filed under my number.

I have to have a $5 license for my greenhouse. I've been inspected once in 15ish years.

[Jena]

I had a business license when I had my meat business. I reported all my income, etc on Schedule F, as it was part of the farm business, but I had to have the license to operate in town (where I sold my goods).

The business license was part of doing business, but had nothing to do with how I filed my taxes.

Jena

[Gailann Schrader]

I have a business license to sell. My wares are primarily soap.

[debra in ks]

I do art commissions all year round and sell water plants in the spring and summer.

I have a tax ID number for my business. I have a KS live plant dealers license. City hall says I don't need a business license for what I do. I have lived in MO and KS and KS is very easy to get along with on almost everything.

[ET1 SS]

I should clarify.

All of Maine is divided into 'townships' on a map. 52% of Maine Townships are 'Unorganized Townships': they have no town hall, no city clerk, and significantly lower taxes.

Organized Townships have a bunch of folk on salary [mayor, clerks, assemblymen, police, fire, code enforcement inspectors, etc], which all require support. So if you live in one of them, then they need to think of ways to add fees and taxes onto everything.

For us who live more rural, we have none of that. We deal directly with the state. It removes a layer of taxation.

We can market our produce [veggies, eggs, cheese, fiddleheads, maple, beef, pork, rabbit, chevron, etc] in open air Farmer's Markets without a 'business license' issued by any township.

Depending on what you are handling, the state may require a license.

For example if you are milking commercially then the state requires a dairy license [fees and inspections].

If you make cheese then a dairy license plus a cheese makers license [two separate licenses from two separate departments, with clearly defined requirements].

IF you then cooked your cheese into cheese cake; then you would need a dairy license form the dairy inspector's office, and a cheese makers license form the cheese maker's inspectors office, and a kitchen license from the kitchen licensing inspector's office.

If you market meat; then you need a licensed meat inspector [either state licensed or USDA, plus you need a licensed meat processing facility [two entirely different licenses from different offices of the state].

If you sale cooked goods like breads, cake, boiled eggs, etc, then you need a kitchen license, from the state.

We have spoken with the state offices about the requirement for each of these licenses, and none of them know anything about the other licenses, and refer you to each other's offices.



Towns that host Farmer's Markets do not require anything from out-of-town vendors. If the farmer/vendor resides within that organized township then that township may levy fees and taxes.

But as a Farmer/Vendor from another township going into a different town's Farmer's Market, their fees do not apply to me. As it is assumed that my township is overseeing and taxing my activity.

[Ravenlost]

We don't have a business license even though we file a Schedule F.