Is Chicken Feed Really Tax Exempt in IN?

[Betsy]

Yesterday I got chicken feed at Tractor Supply. When I went to pay for the feed, I noticed that the clerk was charging me sales tax. When I told him I thought chicken feed was tax exempt, he asked for my phone number to see if I was in the system. He couldn't find either of my numbers in the comptuter, so started asking for my address etc. When he asked me for my social security number or tax ID I shot through the roof and asked why he needed that information. He said they gave it to corporate who gave it to the Federal government. I asked why they did that, and said he didn't know. I said forget it, I'll pay the sales tax. I've heard that one of the ways the government was going to implement NAIS was to require the feed stores give them infomation about everyone who buys poultry or livestock feed, so I wasn't about to give out my social security number!! I asked the clerk if he needed that info due to NAIS...and he didn't even know what NAIS was!!

Last year I bought chicken feed at two small businesses and wasn't charged sales tax. None of the clerks at those places asked for any personal info. When I came home yesterday, I looked at all the chicken feed receipts that date from last year-and Tractor Supply AND Rural King charged me tax for feed! So what do I do? Do you really have to give out all of your personal info to buy chicken feed tax exempt in Indiana? Or should I complain to the Indiana IRS and risk having it on record that I have chickens? ( They tape their phone calls) Or do I forget about getting chicken feed at Tractor Supply and Rural King and get it at the small suppliers? I'd like to stay out of NAIS as long as possible.

 

[CovenantCreek]

It's probably not the feed per se that's tax exempt, but the farm business it's being purchased for. When you bought it in the past you were probably at stores that don't deal with a lot of customers who aren't qualified for the tax exemption as farmers, therefore it was simply assumed that you were also. TSC on the other hand, is such a large corporation that they have to follow the laws to the letter knowing that eventually they will get audited. Here in TN the law changed as of Jan 1st, so all the feed stores now have to have your paperwork on hand proving that you're exempt.

Twenty plus years ago when I'd buy feed for my horses the clerks would always ask if it was for horses or cows -- horses you paid sales tax, cows you didn't.

 

[silkiechicken]

Yeah, it probably depends on the "use" of the feed. If it is for agriculture and you are registered as such, you probably don't have to pay tax. If you are just raising them for fun, then you do. Like how unprepared foods are not taxed, but prepared food are. (At here at least)

At my local co op for feed, I get 5% of the feed cost back at the end of the year. However, if I was buying feed for production purposes, they would tax me on the 5% I get back. Since I am not a real business, I don't have to pay any income tax on the 5% I get back. Odd huh?

 

[justusnak]

In order for your feed to be legally tax exempt in Indiana...you have to apply for a tax exempt #. Most feed stores will have the paper work there to fill out. Every time I go in to get feed....they ask if I am tax exempt. I have the paper work, but I am just not sure yet what it will do to us in the long run...im waiting to ask my tax "people" when I go in next week.

 

[FLF]

Exactly, the chicken feed isn't tax exempt, but certain people and businesses are. You need to apply to be tax exempt, and will then be issued a exemption number. The reason TSC asked you for all your info was to fill out, and then you have sign, the tax exemption form. It's to cover thier behinds in case of an audit. A large box store like TSC is more likely to get audited, especailly since they do alot of home owner business. Most homeowners are not tax exempt. Small feed stores deal mostly with tax exempt business, farmers and individuals, so I'm sure they just assumed that you were tax exempt (as said before) and since they can be "small potatoes" to the goverment, they maybe less concerned with having thier behinds covered.

Our business got nailed a few years ago for not having those tax exemption forms on file! No fun, we had to sit down, with an accountant, and account for EVERY single customer who presented themselves as tax exempt. We are a small business and weren't clear on the regulations at the time. I can only imagine the headache TSC would have in the same situation! They do such a large volume!

 

[Betsy]

Thanks for all the information everyone! I never even heard about chicken feed being tax exempt for anything until last year when I went to those small places and they didn't charge me sales tax. When I asked about the sales tax, they said they didn't have to charge it for chicken feed and said nothing about having to have a farm to get the exemption-and one of those places is a tiny combination feed store/greenhouse/giftshop. It's strange considering the number of people who keep chickens as a hobby or as pets now-just because you live on few acres and have poultry doesn't mean you have a farm.

Well, thanks to you all here at BYC the chicken feed tax situation in IN is clear to me now

Silkiechicken, the tax situation for food is the same here, too. Unprepared foods aren't taxed, prepared foods are.

 

[panner123]

If you want to see a real difference, check out the difference between diesel fuel for a car and for a piece farm equipment. Farm equipment here in Ca. pays over a dollar a gallon less and the color is different. If you get caught with red fuel in your car, the fine is beyond belief.

 

[luvzmybabz]

I know at the feed store that I go to in OK the only time I am charged sales tax is if I buy a bag of dog or cat food with my chicken feed. In Nov I paid in Cash (NO NAIS) 48.64 and .94 tax, tax only on Dog Food, I bought chick starter, laying pellets, scratch and grit and none of it was taxable. They have never asked me for any tax ID # or anything.