Growing Plants For Sale Constituted Farming

Tuesday, July 22nd, 2014

 
 
A Christmas tree farm.
Share
Link
New York
General

The New York Department of Taxation and Finance ("Department") recently released an advisory opinion stating that a taxpayer's cultivation of plants, shrubs, and trees constituted farming.

The taxpayer grew and sold plants, shrubs, and trees. The taxpayer did not grow these from seeds; instead, it bought plants and grew them at its nursery for anywhere from two months to three years. The taxpayer irrigated, spaced, weeded, pruned, fertilized, mulched, re-burlapped, and repotted plants as they grew. When the plants and trees reached certain sizes, the taxpayer sold them.

New York exempts sales of tangible personal property used predominantly in farming. "Farming" includes agriculture, floriculture, horticulture, and silviculture; truck and tree farming; operating nurseries, greenhouses, vineyard trellises or other similar structures used primarily for raising agricultural, horticultural, floricultural, or silvicultural commodities; and raising, growing, and harvesting crops. To be exempt, property must be used in production. Production begins with the preparation of soil and ends when the product is in the form in which the farmer will offer it for sale.

The Department determined that the taxpayer's activities constituted farming and farming production. If the taxpayer sold the plants in the same form in which it received them, the taxpayer's activities would not be farming production. Production would have ended when the plants were in the form in which the taxpayer sold them. Because the taxpayer did not receive plants in the form in which it would sell them and instead tended the plants until they were in saleable form, the taxpayer's activities constituted farming production. The taxpayer could therefore use the farming exemption.

http://www.tax.ny.gov/pdf/advisory_opinions/sales/a14_10s.pdf


About TTR

Transaction (buying or selling things), Tax (the tax on this activity), Resources (our people, our website, our support services) - TTR, Inc.

TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

Economic Nexus in Washington

Monday, August 13th, 2018 -Effective October 1, 2018, certain out-of-state businesses will be required to collect and pay Washington sale...

Economic Nexus in Michigan

Thursday, August 9th, 2018 -Effective October 1, 2018, certain out-of-state sellers will be required to collect and pay Michigan sales or ...

Georgia Suspends Tax on Jet Fuel

Wednesday, August 8th, 2018 -Effective August 1, 2018, Georgia no longer collects state level sales and use tax on jet fuel. Georgia tax...

Employment Services Contracts for Permanent Employees Not...

Monday, August 6th, 2018 -The Ohio Board of Tax Appeals recently addressed whether contracts entered into by an employment services agen...

Alarm Systems and Monitoring Not Taxable in Missouri

Wednesday, August 1st, 2018 -The Missouri Department of Revenue recently released a ruling determining that (1) security, fire, tornado, an...

Economic Nexus in Utah

Wednesday, August 1st, 2018 -Effective January 1, 2019, certain out-of-state sellers will be required to collect and pay Utah sales or use ...