I just bought a farm in NY state and I’m trying to figure out how to get a tax exemption # to use for feed purchases, hay purchases, bedding etc. I know I qualify as a “commercial boarding” business.
The feed store and hay guy always ask for my exemption number, but I’m just not totally sure how I get this.
When I look it up I find a form to fill out, but it looks like I have to fill it out for each individual purchase I make. How do I get this number everyone is asking for?
At my previous location, I was renting a block of stalls and my vendors just applied the facility’s exemption number so I didn’t have to worry about it.
Yes, I do meet those requirements. But if you look at the form on that page it seems like you have to fill it out for every purchase. All my vendors are asking for a number - wondering how one goes about getting this mythical number
Was just hoping maybe someone on here has been through the process before and could give me some tips.
That is because board and related services is subject to sales tax in the state of New York. See “In Matter of New Windsor Stables” before the Tax Appeals Tribunal in NY State. That number entitles you to exemptions on PURCHASES but does not exempt you from collecting tax on taxable services.
Definitely get your accountant involved. Lots of people lie about Tax Exempt #s at feed stores, etc. My accountant told me that this is not an area that you want to screw up in - the penalties are far worse than the hoops.
It is not as simple as just getting a number - you need to prove that you are an eligible business and be prepared to prove it in an audit as well. It will be worth your money involving your accountant, since I assume you will have them help you file your annual business taxes as well.
how’s a $500,000 judgement sound as … case law from New York,
Matter of New Windsor Stables, Inc.,[the Tax Appeals Tribunal (New York’s highest administrative body for tax disputes) upheld a more than $500,000 assessment of tax and interest against a Long Island-based stable for failing to collect tax on certain sales associated with its boarding operations.
just got to love New York, my son’s business is based in the city but when it came the time when wanted to buy some land he stepped over to Pennsylvania
here in Texas feed , hay and bedding are not subject to sales tax so no number is required (and you can not get exemption number for horses in most cases as the state views them in most cases as as pets not ag animals)
In the states I have set up in. Form an LLC or what ever kind that suites with the state. Apply and get a EIN number from the IRS. Get the tax exemption form and fill out. Send and wait for the state to send back your tax exemption number.
The suppliers you use will have a Tax Exemption form for you to fill out and sign. Which they keep on file. It will.should be “tagged” to your business name and or the businesses phone number. So at check out you tell the the cashier you are tax exempt and give your business name or phone number. Not everything is tax exempt the store’s computer will take off tax on things that are exempt.
Some suppliers/stores, like Tractor Supply have you sign a form (computer “form” on the credit card check out). Basically saying you are the person the tax exempt number is attached to. Not using someone else’s number.
Some suppliers will want this updated each year. Some you do once and never asked again.
If memory serves there was a bit more to this than the article goes into.
Having been through an audit a lot comes down to “intent” and the feasibility of the business model actually making a profit. Having lived on Long Island with the cost of land and the extremely high property taxes. It would be next to impossible for a boarding operation, as most of us know it to make a profit. Esp a small one.
I wonder how the state handles "boards at least 10 horses (regardless of ownership). Does the operator just have to have 10 “stalls” or 10 horses in those “stall” year round? Or X days a year? It is certainly not unusual for a boarding operation to be “full” year round. Then there are times when stall will be empty for X days or months when they loose a boarder and have to wait until they are replaced.
“receives $10,000 or more in gross receipts annually from fees generated from:”
Any boarding operation that can’t meet this. Isn’t in the business of making money.
“The stable was also assessed tax on certain sales of horses it could not substantiate were out-of-state sales or otherwise exempt”
Having bought expensive horses in NY. This is easy to get around and document for tax exemption. After the purchase the buyer has X days to ship the horse to another state. But this HAS to be done by a fully registered Commercial Shipper. Which will give a “bill of laden” with the name/ID of the horse and where it is being shipped to. The seller and buyer needs to keep this on file in case of an audit.
I don’t remember how long the horse has to reside in another state. I am sure that detail can be found. After X days the horse can be brought back into the state. Even to the same farm. As long as everything is well documented and will pass the sniff test.
As with most states a farm operation, boarding operation for Thoroughbred breeding and racing qualifies as “horse business” and can take advantage of standard state business tax exceptions. I am not sure if NY recognizes Sport horse, show horses, boarding of “pleasure” horses as the same?
PA didn’t recognized “Sport horses” as Ag the same as Thoroughbred farms until a few years ago.
The state should have a form that you can file with a vendor that they can keep in their files to document a business’s sales tax exemption status … for materials that can be bought that way. There should most likely be a check box on the form that says it’s for on-going business rather than “one time”. You should not have to be filling it out continually with each purchasing event. In most cases, having the exemption doesn’t mean “everything” the business buys is sales tax exempt. When I registered my business here in PA, for example, they sent out a pretty explicit list of things that did NOT quality for tax exempt purchasing.
That’s why you need to use an accountant. And honestly, what start-up small business owner doesn’t use an accountant to make sure they are doing things right, even if you don’t want to use them annually? Even my farrier has an accountant to make sure he’ll pass an audit since he gets paid in cash and personal checks.
Tax exemption is serious stuff. Worth hiring an accountant to help you understand it.
