Agriculture Exemption??

[holsteintater]

We are getting ready to move to a small farm where we'll have some chickens and 2 goats - just to supply food for our family. We're going to have to buy the animals, the fencing, etc. I'm just wondering because I've read about this on here, are those things state deductible if it's for personal use instead of a business? What is the agriculture exemption in Ohio? TIA!

[Darren]

I'm not sure what you mean by a state exemption. There's a couple of issues that affect you. If you're pursuing farming as a business you can apply to the state and get a sales tax ID which you can use when purchasing to avoid the sales tax on items for use in the business.

Most states have an agricultural exemption which allows a lower tax rate on property used for farming. You don't necessarily have to be engaged in farming as a business to qualify. WV follows the federal guidelines for farming. You must produce at least $1,000 of product each year for sale or for on farm consumption to qualify as a farm and the ag exemption. Most folks can cut hay and use it themselves if they have any acreage. It also includes the value of the livestock and other stuff such as produce, honey, etc. that your farm produces.

[marvella]

to be taxed as a farm, i had to sign up for the greenbelt program. you must have a minimum of 15 acres, and produce $4500 over 3 years in farm revenue. it made a huge reduction in my property taxes. i'll let you know what it does, if anything, for my income tax next year.

[Mike in Ohio]

holsteintater,

First off, I am not a lawyer nor am I an accountant. I do however use both.

You can only be exempt from sales tax if you are using the items in a business, not for personal consumption.

As far as CAUV (Current Agricultural Use Valuation) you need to produce something between $2,000 and $2,500 a year (gross) worth of agricultural products from your property. If the property is more than 10 acres you generally don't need to prove the value of what you produce. If less than 10 acres it becomes an issue. Talk with your county auditor.

The fee for filing CAUV is $25 per parcel. There is a form that you will fill out. You will be asked what you are producing.

It will generally take you 3 years to get a parcel into CAUV and if it becomes uneligible you will be obliged to pay the difference on the previous 3 years taxes. The county auditor will be out once a year (generally June) to check the property. If you are doing unusual crops (fro example, our local auditors office didn't "get" apiaries and black walnuts so I had to spend time educating them on what we were doing).

Hope this helps.

Mike