Farm exemptions allow certain laws that apply to other businesses to not apply to food production efforts, often related to taxes and encouraging agricultural development. Exemptions include property tax, gasoline purchases, sales tax on products, and labor regulations. Building permits and local ordinances also do not apply to farms and ranches.
Farm exemptions essentially mean that certain laws that apply to other businesses cannot apply to food production efforts. In many cases, these exemptions are related to taxes and serve to encourage agricultural development. In some cases, however, an agricultural exemption may be offered when the application of a specific rule would cause undue hardship to these types of businesses.
To encourage new farm installations, many regions offer property tax exemptions on land used primarily for food production. Although the loss of tax revenue can be significant for larger agricultural regions, neighboring communities often benefit from additional job creation. Additionally, food prices in these areas are frequently driven down by an influx of meat and local produce.
Local governments may file an agricultural exemption from the taxes and fees associated with gasoline purchases. Often these exemptions come as rebates or lower prices on bulk fuel purchases. Proof of exclusive agricultural use of gasoline is generally required to qualify for these programs.
In some areas, farmers and ranchers may be offered an agricultural exemption for sales tax on products purchased for their operations. Seeds and seedlings grown for food are often not taxable, as are animals for breeding or breeding purposes. Sometimes animals used in agricultural operations, such as plow horses or sheep dogs, may also be exempt from sales tax.
Other items may be granted an agricultural sales tax exemption if it can be shown that they will be used exclusively for agricultural operations. Planting and harvesting tools and machinery are often included in this classification. Certain construction materials such as fencing and irrigation pumps may also be exempt. Construction materials for specific animal housing, such as chicken coops, may also be exempt. In contrast, supplies for sheds and multipurpose buildings are often taxable.
An agricultural exemption from local labor regulations is also common, particularly during the planting or harvesting of crops. During these time periods, an employee’s maximum legal work hours per week may be extended to prevent crop spoilage. In places that require benefits for full-time employees, that requirement may not apply to part-time farmworkers who are temporarily working full-time.
In general, any new construction on commercial or residential zoned properties requires prior approval. In contrast, creating new structures or modifying existing structures on agricultural land generally does not require building permits. Additionally, local ordinances regarding noise levels and water use generally do not apply to farms and ranches.
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