Chute N The Bull

Chute N The Bull 209
Tax exemptions and special provisions are important to farmers and
ranchers, but they are a relatively small part of the total tax
exemptions and exclusions granted to taxpayers by state and local
governments. As these laws are reviewed, farmers,
Ranchers and agribusiness managers as well as governmental officials
need to be informed about the tax exemptions for agriculture and the
potential effects of any proposed revisions. Like other businesses and
most individuals,
Texas agriculture and agribusiness firms pay state and local taxes and
enjoy certain tax
Exemptions and special treatments provided by the Texas Tax Code. This
year, a legislative interim committee is reviewing tax laws in Texas.
The committee is expected to recommend changes in these tax laws at the
next legislative session. Farmers, ranchers and agribusiness managers
need to know about the current tax provisions that benefit their
industry so they may be better informed in the upcoming debates over
proposed tax revisions. They also need to know the appropriate state or
local agencies to contact to take advantage of the tax benefits provided
by Texas law. Several tax provisions benefit Texas farmers, ranchers
and agribusiness firms, including: Exemption from state and local sales
and use taxes on purchased farm inputs and products. The provision for
local property tax productivity valuation for open space land.
Exemption from sales and excise taxes on fuel used on farms and ranches.
Certain exemptions from state franchise taxes. Of these, by far the
most significant tax savers for farmers, ranchers and agribusinesses are
the exemption from sales and use taxes at the state and local level and
the provision for open space productivity valuation of land used
in agriculture, timber or wildlife production. Farmers and ranchers are
exempt from state
and local sales taxes for several items, including most inputs bought
exclusively to produce agricultural goods and services. The exemption
covers: Virtually all inputs purchased for farm and ranch use (such as
feed, seed, equipment
and chemicals). Products sold by farms and ranches (such as grain,
milk, livestock and raw cotton). Certain processed product sales that
meet the following exemption criteria: that the processing is done where
and by whom the original products were produced; and that the processor
does not process products for other agricultural producers (Texas Tax
Code, 151.316). This provision applies to agricultural businesses that
make valueadded products from produce grown on the farm. An example
would be applesauce, pies, etc. made on the farm where the apples are
grown. Without the sales and use tax exemption, farmers and ranchers
would pay a 6.25 percent
state tax plus a local sales tax of up to 2 percent depending on local
rates levied by
cities and counties — on purchased inputs and product sales. In 2001,
the total sales tax exemptions granted on agricultural items amounted to
almost $306 million, according to the Texas Comptroller of Public
Accounts (Table 1). Most of this exemption was for the purchase of feed,
seed and supplies ($230.2 million) and machinery
and equipment ($52 million) for use in producing agricultural products.
Although these tax savings are important to individual farmers and
ranchers, these exemptions
amounted to only 1.6 percent of the value of all sales tax exemptions in
Texas in 2001.
Moreover, this percentage is projected to decline to 1.4 percent of
total sales tax exemptions by 2006. For example, the total value of the
sales tax
exemption on agricultural items amounted to almost $306 million. In
contrast, exemptions on manufacturing materials, equipment and supplies
totaled more than $8 billion. Also, the value of sales tax exemptions on
agricultural items trailed that of other exempted sales categories such
as food for home consumption, and manufacturing and residential gas and
electricity (http://www.cpa.state.tx.us/taxinfo/ incidence/). To obtain
the sales tax exempcomplete a sales tax exemption form when buying the items. You can find
this and past articles on the web at www.mycountrytractor.com for your
reference. Extension programs serve of all ages regardless of
socioeconomic level, race, color, sex, religion, disability, or national
origin. The Texas A&M University System, U.S. Department of
Agriculture, and the County Commissioners Courts of Texas Cooperating.


Tommy Neyland, CEA-Ag
Texas Agrilife Extension Service

Kids Kamp

Kids’ Kamps Need Your Help
Do you remember seeing all the pictures and reading in the newspapers
about Kids’ Kamps last summer? In case you didn’t know, most of these
were provided through our local county Extension office. Kids were
provided with day camp activities to enrich their summer. They were
excited to be fishing, gardening, cooking, and learning about future
project opportunities with 4-H.
Well, it’s time for the Texas AgriLife Extension office in Leon County
to start planning for the summer 2009 Kids’ Kamps. Activities in past
years have included sport fishing, flower arranging, manners,
horticulture, “cupcake” decorating, entomology, shooting sports, sewing,
and fashion. More exciting activities are being planned for this summer!
Here is where we need your help. These camps require a fee, and this
creates a hardship for some families, especially those with several
children.
The Leon County Leadership Advisory Board wants to appeal for your help
this year in paying the fees for all the children who wish to be
involved in Kids’ Kamps. Wouldn’t it be great if every child left camp
with a fishing pole, necklace, flower arrangement, or some memorabilia
from their camp experience?
Any donation toward making this possible will be greatly appreciated,
and you can become an event sponsor with a donation of $200. Every
elementary parent/child will be notified through a newsletter and in the
county newspapers announcing the various camps and your sponsorship.
For more information please contact Tommy or Wendy Neyland at
903-536-2531 or any member of the Leadership Advisory Board. Board
members include: Brian Hill, Gary Robertson, Charlie Patin, Susan Pugh,
Faith Kellar, Elaine Trefry, Lenora Oden, Melinda Wilson, Kathy Pierce,
Karen Robeson, Dale Birran, Daryl Alston, Russell Jonas, Kay Serafin,
Gayle Wilson Ray, Jason Jeitz, and Clara Jones.


Tommy Neyland, CEA-Ag
Texas Agrilife Extension Service