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New Sales Tax Laws Impact Farmers

There are two new sales tax laws in North Carolina that impact farmers.

One new requirement is included in the North Carolina Tax Simplification and Reduction Act (105-164.13E. Exemption for farmers). It states that farmers must have “annual gross income of ten thousand dollars ($10,000) or more from farming operations for the preceding calendar year” to qualify for sales tax exemptions on purchases. This is a change in that prior to this, there was no bottom threshold for farmers for gross income (farmers only needed to have reported “farm income” of any amount on their Federal tax filing). The form for this exemption is Form E-595EA but it is unlikely to be updated yet to reflect the new requirement. It is my understanding that the North Carolina Department of Revenue is currently working on clarifications on compliance for this that should be released soon.

The other new tax law concerns farmers’ sales. N.C.G.S 66-255 requires all farmers who sell at farmers markets, even farmers exempt from paying sales tax, to obtain a certificate from the Department of Revenue and prominently display their certificate at market. It has other requirements for farmers and for farmers market managers. I have written on the specifics at New NC Legislation (N.C.G.S. § 66-255) to Impact Farmers Markets. ASAP has also created a guide to compliance at Guide to Compliance with N.C.G.S. § 66-255 For Farmers Market Managers and Vendors. This law is active now so markets and farmers selling at market are currently required to be in compliance. If you would like to let your representative know how you feel about this you can find your representative at www.ncga.state.nc.us/representation/WhoRepresentsMe.aspx.

Keep an eye on this site where we will continue to provide the most up to date news and information on the status of this statute.

Charlie Jackson, Executive Director

 

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