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May 2013

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Subject:
From:
Ben Waterman <[log in to unmask]>
Reply To:
Vermont New Farmer Network <[log in to unmask]>
Date:
Wed, 22 May 2013 10:38:31 -0400
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Good info FYI about farm taxes...

-------- Original Message --------
Subject: 	Re: Hobby loss and VT. Dept. of Taxes
Date: 	Wed, 22 May 2013 07:43:13 -0400
From: 	Bob Parsons <[log in to unmask]>
Reply-To: 	Bob Parsons <[log in to unmask]>
To: 	[log in to unmask]



The following email came from Glenn Rogers and pertains especially to 
many small farmers in Vermont and particularly, those farmers who sell 
individual servings at Farmer's Markets.  See #2 below.

These points came from a recent audit of a "farmers" by the State of 
Vermont.  Message is that you can be audited by the state as well as the 
federal government and while some rules are the same, there are some 
differences.


-------- Original Message --------
Subject: 	Re: Hobby loss and VT. Dept. of Taxes
Date: 	Wed, 22 May 2013 07:17:27 -0400
From: 	Glenn Rogers <[log in to unmask]>
To: 	



Dear colleagues: Please share with whomever you want.

     It is important that Vermont Farmers realize that they must follow 
the Federal, AS WELL AS STATE, rules when filing their income taxes.
It is also important that while they may not be audited by IRS, they may 
be audited by the state of Vermont for the same rules or for just state 
items.

     For instance, should a "farmer" have a loss in 3 of the past 5 
years (and is audited) then is the responsibility of the taxpayer to 
prove that they are in fact farming as a business and the losses are 
justified.  This audit may take place by the Federal or state.
>     For instance, the Vt. Dept. of Taxes may dis-allow the schedule F 
> *losses *(even tho the Federal was not involved and no audit was taken 
> on the federal side -- but in a state audit the state may disallow the 
> losses taken on the federal and transferred to the state.) Should the 
> state determine that the farm was a "hobby".  In which case, no losses 
> would be allowed.
>
>     Remember all the Hobby loss rules as outlined by pub 225.  They 
> need not ALL be met but "facts and circumstances" affect the situation 
> and thus the rules that must be followed.
>
>   Here are some other items of concern.
>     1.    Remember to pay the Sales & Use tax on all appropriate 
> items.  If buying equipment in NH for a Vermont taxpayer then a sales 
> tax must be paid whether paid via credit card, check or cash (unless 
> exempt by VT).  Vt. Dept. of Taxes can audit (and has audited) NH 
> businesses to determine if sales took place to Vt. taxpayer and no 
> sales tax was paid by the Vt. taxpayer on the VT. tax return or to the 
> dealer.  Also some items used in business must have a sales tax paid 
> on it.  For instance: lumber, and rentals.  Other items are exempt 
> from sales tax for businesses.  Check with your accountant and the Vt. 
> Dept. of Taxes for those items that are exempt.
     2.    Vt. food sales of individual servings must collect meals tax 
- such as 2 slices of pie, 2 donuts, 2 meals, etc.  A whole pie is  
different and not subject to the meals tax.

>     3.        Remember to make all income tax, and other applicable 
> tax deposits on time
     4.    Remember that if > $500 income tax is due on the Vt. tax 
return and no timely deposits made to bring it below $500 then a penalty 
may be due.

     5.    Vt. Use Value appraisal forms must be filed when the property 
in "current use" changes hands.  Even if you put the farm in a 
"revocable trust", add one name to the deed, or other change you must 
file with the "Current use" division of the Vt. Dept. of taxes in a 
"timely fashion" as outlined by the rules. 
http://www.state.vt.us/tax/pvr.shtml
>
>     6.  If you buy items from out of state, whether by store or 
> internet, and sales tax is due, then you must report that purchase and 
> the applicable sales tax due.  One way to do this is to use the 
> standard formula as provided by the Vt. Dept. of Taxes.  Big purchases 
> ($1,000 or more need to be calculated accordingly).
>
> For further information please contact your tax specialist and Vermont 
> Department of Taxes.
     The website for the Vermont Dept. of Taxes may be found at: 
http://www.state.vt.us/tax/index.shtml
> Remember the "facts and circumstances" in each case.
> Glenn
>
> CC: Bob Parsons
>         Dennis Kauppila
>         Mary Peabody
>
> -- 
> Glenn Rogers
> UVM Extension Income Tax Consultant
> Professor Emeritus - UVM
> 17 Fairview Dr.
> Essex Jct.
> Vermont 05452
> 802-318-5387
> [log in to unmask]
>
> This communication may contain privileged and/or confidential information. It is intended solely for the use of the addressee. If you are not the intended recipient, you are strictly prohibited from disclosing, copying, distributing or using any of this information. If you received this communication in error, please contact the sender immediately and destroy the material in its entirety, whether electronic or hard copy. This communication may contain nonpublic personal information about consumers subject to the restrictions of the Gramm-Leach-Bliley Act. You may not directly or indirectly reuse or redisclose such information for any purpose other than to provide the services for which you are receiving the information.

-- 
Glenn Rogers
UVM Extension Income Tax Consultant
Professor Emeritus - UVM
17 Fairview Dr.
Essex Jct.
Vermont 05452
802-318-5387
[log in to unmask]

This communication may contain privileged and/or confidential information. It is intended solely for the use of the addressee. If you are not the intended recipient, you are strictly prohibited from disclosing, copying, distributing or using any of this information. If you received this communication in error, please contact the sender immediately and destroy the material in its entirety, whether electronic or hard copy. This communication may contain nonpublic personal information about consumers subject to the restrictions of the Gramm-Leach-Bliley Act. You may not directly or indirectly reuse or redisclose such information for any purpose other than to provide the services for which you are receiving the information.





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