New Tax Could Put Tennessee Horse Owners in Bind

As if the drought wasn't enough for the farmers of Tennessee. Beginning Jan. 1, all people buying feed (hay, grain, etc.), farm equipment, and other tax-exempt farm supplies in the Volunteer State had to present proof of exemption or pay almost 10% more for their purchases. However, some horse owners might be exempt.

In the past Tennessee farmers enjoyed securing their tax-exempt feed and farm supplies at a cheaper rate. Now, if your farm does not turn a profit of $1,000 per year or more, or you do not provide for-hire agricultural services (boarding horses, etc.), those tax-free days might be gone for good.

The 9.75% state sales tax addition is not a new tax, but it is a part of the Streamlined Sales Tax Project passed in 2003. It will, however, be felt the hardest among recreational owners: those who own horses or other livestock as pets--not as sources of revenue.

Farmers selling hay could also struggle under the new guidelines.

"Many farmers already struggle with the administrative sides of their business," says Sandy Tombaugh of the National Hay Association. "Adding to it the idea of obtaining a sales tax number and filling out monthly forms, collecting extra monies and having to turn around and send it back in to the state certainly won't help their plight."

Sophie Moery, spokesperson for the state's Department of Revenue, stressed that the vast majority of people in Tennessee's agricultural community qualify for this exemption, and they can have a certificate turned around in just a few business days.

"This implementation was put in place to ensure certified members of the agricultural community could still take advantage of the tax exemptions, while keeping people for whom the exemption was not intended from abusing the system," Moery said. "People may not qualify for something they assume they should, but there are several other ways to still qualify for the exemption."

For more information about these exemptions, visit the Tennessee Department of Revenue Web site. Horse owners can also call the department's tax hotline at 800/342-1003.

About the Author

John V. Wood

John V. Wood is an Emmy Award-winning journalist, and now teaches his craft to high school students in North Carolina. Wood has been published in numerous national magazines/newspapersover his career, and published his first book in June 2010. Wood currently lives in Willow Spring, NC.

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