On the topic of tax exemption. Can I purchase plants at a tax exempt...

Asked March 6, 2016, 7:51 AM EST

On the topic of tax exemption. Can I purchase plants at a tax exempt wholesale price to be used for cut flower sales? Even if it may take a year or two to get the plants well-established?

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3 Responses

I am not qualified to answer your question. I would suggest speaking with a tax professional or CPA.

I thought you were an 'expert' on tax exemptions for ag use? I don't see this as a CPA question.

Your question is not something that I can answer without some additional information as you did not provide your location? Are you currently a farm? Are you reporting farm income?

So I will address your questions as if you lived in Michigan. Here you would be able to purchase supplies that are used in the production of commodities for sale under a Michigan Sales Tax Exempt status. You would be signing affidavit that you verify that you are a farm and that the supplies (plants or seeds) that you are purchasing are for the commercial production of commodities for sale on a retail basis. To verify that here we would ask the question did you file a Federal 1040 – Schedule F form as part of your tax return last year. If you are not currently reporting farm income then you would fail one of the test questions as to your ability to make purchases under a Michigan Sales Tax Exempt status. Normally the question would be if you can deduct the cost of these flower plants in the year of purchase as they in your description will not be in production for a year or so.