A review of power farm equipment exemptions

A review of power farm equipment exemptions

WITH A KEEN EYE on the business bottom line, it serves you well to stay on top of all the tax exemptions available from the state and federal governments and use every one that applies to your particular operation. In most cases, accountants and tax lawyers are the folks paid to be up to date about such matters while you busily go about the business of running your business.

Recently, we came across an item that reminded us of a very favorable farming-related tax exemption from 2005. Though 10 years old, the exemption is worthy of review because it remains available. Effective July 1, 2005, the sale, purchase, or rental of qualifying power farm equipment became fully exempt from Florida sales tax. Earlier that year, the state Legislature passed a law that changed the partial exemption for certain self-propelled, power-drawn, or power-driven farm equipment to a full sales tax and discretionary sales surtax exemption.

The Legislature also amended the exemption to include certain new or used “power farm equipment.” This equipment includes moving or stationary equipment that contains the means for its own propulsion or power; and moving or stationary equipment that depends upon an external power source to perform its functions. The “power farm equipment” must be for exclusive use on a farm or in a forest in plowing, planting, cultivating, or harvesting crops or products produced by agricultural industries specified by law; or for fire prevention and suppression work for such crops or products.

Examples of qualifying “power farm equipment” include augers, combines, conveyors, disks, dozers, feeding systems, harrows, hay balers, irrigation motors, mowers, plows, pumps, skidders, and tractors. The exemption also includes qualifying generators and power units.

References for this exemption include House Bill 643 (2005); Sections 212.02(30)-(32) and 212.08(3), Florida Statutes; and the Florida Department of Revenue website at www.myflorida.com/dor (tax tip No. 05A01-03).

CREDIT

column by BAXTER TROUTMAN

BIO: Baxter Troutman is founder and chief executive officer of Labor Solutions, a staffing company with offices in Bartow, Winter Haven, Lake Wales, and Arcadia. A citrus grower who served in the Florida House of Representatives, Troutman understands the challenges and concerns of today’s farmer.