|
|
|
NMSU publication reviews taxes affecting agricultural producersNew Mexico With tax season just around the corner, a New Mexico State University Cooperative Extension Service publication has been revised to remind agriculture producers to be aware of various taxes that affect their operation. There are several forms of taxation that producers might overlook if they are not aware, including fuel tax, gross receipts tax and the impact of how cattle are reported on the producer's income and self-employment tax, said Jim Libbin, professor of agricultural economics and agricultural business. According to the publication titled "Taxation and Livestock Production in New Mexico," progressive tax management can facilitate successful management and reduce the overall stress associated with livestock management. It provides a basic understanding of the tax liability of a typical ranching unit in New Mexico, Libbin said. The publication was co-written by Libbin and Jerry Hawkes, extension specialist and assistant professor of agricultural economics and agricultural business. To view the publication visit http://www.cahe.nmsu.edu/pubs/_circulars/CR-635.pdf, or contact your county extension agent. "One tax deduction that is easy to overlook is fuel tax for off-road implements, such as tractors," Libbin said. "If the gasoline is purchased through a distributor for a farm-storage tank, a road-use tax should not be charged. Traditionally, that fuel is dyed to indicate a tax has not been assessed. But if the fuel used for off-road equipment was taxed, the agriculture producer can claim it back with a special tax form." Another tax that a producer needs to remember is the gross receipts tax if they sell agriculture commodities, such as vegetables at a farmer's market. Producers are responsible for paying the gross receipts tax to the state. "Because the producer is not selling wholesale, but rather retail, they are required to pay a gross receipts tax on the sale," he said. An agricultural producer needs to be clear about the self-employment tax and the income tax, which they could be paying both. "One mistake I see livestock owners doing frequently is that they don't separate their breeding livestock from their market livestock on their income tax return. They report the sale of cows and bulls held for breeding purpose on the incorrect form," Libbin said. "There is a special form, Form 4797, for breeding stock sale. If a producer reports their cull cow sales on the Schedule F, they will pay self-employment tax on the breeding stock when they shouldn't have." With the use of Form 4797 the income slides past the self-employment tax and goes straight to the income tax. Market livestock income is reported for the self-employment tax before it moves on to the income tax. Libbin suggests that if agricultural producers are not up to date on the tax laws, they should seek help from accountants who have experience in agricultural tax preparation. "I suggest using a tax accountant that is familiar with agricultural production. It's almost impossible to do one or two agricultural tax returns a year and keep up with the various tax laws related to this industry," he said. 11/24/08 Date: 11/20/08 Advertisement
Copyright/Privacy
Copyright 1995-2009. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
Market Snapshot Inside Futures |
