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#29 Collecting Sales Tax on Farm Product Sales

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Products Exempt from Sales Tax Collection

Farmers do not need to collect sales tax on farm and food products intended for human consumption; this includes: all fresh and processed foods: fruits, vegetables, baked goods, jellies, jams, preserves, meats, eggs, dairy products, syrup, honey, cider, etc. (unless listed below).

Taxable Farm and Food Sales

When selling direct to consumer, you must collect sales tax on:

  • Prepared foods intended for immediate on-site consumption
  • Candy
  • Soft drinks and fruit juices with less than 70% real juice
  • All non-food products that are being sold to the end user
  • Cut flowers, bedding plants, trees, shrubs, and other nursery products
  • Forest products, firewood**, Christmas trees, lumber
  • Fiber products (raw fleece or wool products when sold direct to end users)
  • Hay, grain, straw (taxable if not being sold to another farmer)
  • Horses sold for pleasure riding
  • Ornamental crops like gourds, Indian corn, dried flowers, evergreens, etc.
  • Crafts
  • Topsoil, turf, gravel

Note: if these items are sold to someone else who will sell them directly to the public, you do NOT have to collect the sales tax, but you will need to file a resale certificate.
**Firewood sold for home heating is not taxable; while firewood sold for recreational purposes (campfire, bonfire, cookout) is taxable.

Becoming a Sales Tax Vendor – Form DTF-17-I – Certificate of Authority

This means you are involved in the direct sale of products to consumers/end users and must collect sales tax if selling the above taxable items.

There are several types of sales tax vendors:

  • Regular Vendors – with a permanent location
  • Temporary Vendor – with sales in no more than 2 consecutive quarters in any 12-month period
  • Show Vendor – sells products at a flea market, craft fair, show, or farmers’ market, on either a regular or temporary basis and does not have a permanent location

You cannot legally make taxable sales until you have received your valid Certificate of Authority. 

  • Apply for your Certificate of Authority at least 20 days before you begin operating your business
  • Your Certificate of Authority must be displayed prominently at your place of business or at fairs/markets
  • It is very important to keep detailed records of your taxable sales
  • Each transaction must include the item price and sales tax amount. Retain a copy of the receipt. Records should be kept for 3 years

Filing Requirements

  • You must file a return each quarter even if you had no sales. Initially you will be classified as a quarterly filer. Monthly and annual filing options are available if you qualify. Do not forget to file as penalties are stiff
  • Download the form as a PDF at tax.ny.gov/pdf/current_forms/st/dtf17i.pdf

For More Information

NYS Dept. of Taxation and Finance Publication 750: A Guide to Sales Tax in New York State
Obtain by contacting: 800-462-8100
http://www.tax.ny.gov/pdf/
publications/sales/pub750.pdf

 

 

 

 

 

 

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