Selling Fruit trees in FL, is there sales tax?

[FlyingFoxFruits]

Sorry if this is an off topic thread, but I'm confused about sales tax and fruit trees in FL.

I thought they were exempt from sales tax, as long as they're plants that produce food?

according to this law:  12A-1.048 Sale of Agricultural Products

(1)(a) The sale of agricultural products direct from the farm when made directly by the producer is exempt. The producer is not required to obtain an exemption certificate from the purchaser to make tax exempt sales of agricultural products. This exemption does not apply to the sale of ornamental nursery stock.

(2)(a) The sale of ornamental nursery stock by any person, including producers of agricultural products, is subject to tax. The term "ornamental nursery stock" applies to all plants, shrubs and trees customarily sold by nurseries for landscaping purposes, regardless of the state of growth or maturity, but does not include plants used to produce food for human consumption. Sod and ferns are examples of ornamental nursery stock.



I'm wondering because I notice some FL (mail order) nurseries who charge sales tax on their fruit trees.

any input will be much appreciated!

thanks!


Adam

[HMHausman]

I'm no expert, and the legal advice you are hereby receiving is probably worth what you are paying for it. It has been my understanding that tax is not required on fruit trees.

[dongeorgio]

I've never knowingly been charged sales tax on fruit trees from any of the nurseries I have been to.  That does not mean that they haven't built sales tax into the selling price but I am fairly sure that fruit trees are exempt. 

[FlyingFoxFruits]

thanks for your two cents yous two.

I really appreciate it.

[cbss_daviefl]

Those collecting tax may be ignorant of the laws or think it is better to just collect the tax for everything they sell. I have been told by my customers, if audited by the state and they find a violation, they typically examine a small period, like a month, in detail, find the violations for the small period, and multiple by the entire audit period, multiple years.  I have been asked before to provide this detailed information on behalf of my customers.

[FlyingFoxFruits]

Those collecting tax may be ignorant of the laws or think it is better to just collect the tax for everything they sell. I have been told by my customers, if audited by the state and they find a violation, they typically examine a small period, like a month, in detail, find the violations for the small period, and multiple by the entire audit period, multiple years.  I have been asked before to provide this detailed information on behalf of my customers.

ya that must be the case.

its sad not only that our law are so confusing....but also that you could put your company in jeopardy by charging sales tax when it's not required....I bet there is a penalty for charging sales tax on exempt items!

[Cookie Monster]

i love florida tax laws.

[FlyingFoxFruits]

I've come to realize, it's the fear of the department of revenue that makes people charge taxes for exempt items.

I wish I could convince some of the FL nurseries to not charge sales tax on their edible plants.

What's the purpose of exempting items from sales tax, if we aren't going to honor their exemption?

The law clearly states that if you are the producer of an edible plant, you can directly sell those plants to the buyer, free of sales tax, and you do not have to get an exemption certificate from the buyer!

what also confuses me, is the fact the Home depot and lowes (i've heard) charge tax on fruit trees?

I guess in the end its up to the seller, whether or not they want to honor the exemption.

[Cookie Monster]

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

[puglvr1]

Fwiw I have been charged sales tax on fruit trees before. Just a few days ago. Bought a citrus tree from a nursery 

I too thought fruit trees were tax exempt? Guess not all counties 

[FlyingFoxFruits]

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

Ok...this is wearing down on me now.

I just called home depot, and asked them if they charge tax on fruit trees, and they confirmed that they don't charge tax....and they are not the producers of the plants (matter of fact, zill's is the producer...LOL)

these days its pretty much impossible to know the law, and to follow it at all times.

that must be why people are scared and confused....and end up collecting taxes for anything and everything....even exempt items.

[BENDERSGROVE]

Adam, no tax on fruit trees used for production, PIN, has the ordinance if you want a copy call Ron at pin.

[Cookie Monster]

Does the depot pay tax when they buy from zills?

Confusing, eh?

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

Ok...this is wearing down on me now.

I just called home depot, and asked them if they charge tax on fruit trees, and they confirmed that they don't charge tax....and they are not the producers of the plants (matter of fact, zill's is the producer...LOL)

these days its pretty much impossible to know the law, and to follow it at all times.

that must be why people are scared and confused....and end up collecting taxes for anything and everything....even exempt items.

[cbss_daviefl]

I am 99% sure HD is not buying from Zills but another wholesale nursery that is probably buying some from Zills.  These big retailers want to receive product from as few vendors as possible.  I believe they may even be willing to pay a tiny bit extra for the select vendors to broker plants they do not grow to this end.  They would rather receive a single tractor trailer load of plants then receive fifteen box trucks in a day.  Fruit trees represent a tiny portion of what they sell from the garden center and would not be enough to justify a fruit tree dedicated vendor.

HD does not pay sales tax on anything they resell.

[PltdWorld]

There was an article that ran in the San Diego Union Tribune a couple of months ago about districts charging the wrong tax rates.  In San Diego there are a dozen or so tax districts.  The tax rate charged is based on where the item is sold.  In mail order, it is based on where it is delivered.

In California... regulation 1588 specifically exempts sales tax on seeds, plants and fertilizer used to produce food for human consumption ... which includes fruit trees, berry vines, etc.

[fruitlovers]

Here it's also possible to buy a fruit tree, or any plant that produces food, using EBT cards, aka food stamps. That might be a nation wide law?

[zands]

Here it's also possible to buy a fruit tree, or any plant that produces food, using EBT cards, aka food stamps. That might be a nation wide law?

State by state. States regulate EBT and food stamps even though a lot of Federal money is involved. State money too. Someone can qualify for food stamps in Hawaii but not in Wisconsin.

[fruitlovers]

Here it's also possible to buy a fruit tree, or any plant that produces food, using EBT cards, aka food stamps. That might be a nation wide law?

State by state. States regulate EBT and food stamps even though a lot of Federal money is involved. State money too. Someone can qualify for food stamps in Hawaii but not in Wisconsin.

Florida does accept use of EBT cards for "plants or seeds that produce food to eat"
http://www.ebtcardbalance.com/buy-food-Florida-ebt-card-el8
Ofcourse not every nursery will be set up to accept EBT cards, but big department stores all can.

[MangoMan2]

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

Adam,

Jeff just nailed it on the head.

Joe.

[FlyingFoxFruits]

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

Adam,

Jeff just nailed it on the head.

Joe.

yes but that doesn't make sense if HD and Lowes aren't charging tax on the trees they're reselling that are produced by zills.

[Jsvand5]

Does HD and lowes even buy the trees they are selling? I was always under the impression that they didn't pay their vendors until the tress were sold.

[cbss_daviefl]

Yes, but maybe not all of their vendors are paid on standard X number of days payment terms.  In 2004, a nursery that sold annuals to HD was a customer of mine and I heard rumblings of pay-by-scan, payment based on when a customer bought.  They were bought by a company in California and they ended up closing the business and selling the land to residential developers. During spring, standard terms are to HDs advantange since product moves quickly.

[fruitlovers]

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

Adam,

Jeff just nailed it on the head.

Joe.

yes but that doesn't make sense if HD and Lowes aren't charging tax on the trees they're reselling that are produced by zills.

Adam, i think you are confusing wholesale with retail sales. An item can be sold many times on wholesale basis to different distributors, before it reaches final retail customer.

[FlyingFoxFruits]

I think where the law is different is where one is re-selling fruit trees. If the nursery is selling directly to the person who's going to plop them into the ground, then the exemption probably applies, but if the purchaser is going to re-sale, then it could make sense to charge tax on the initial transaction.

Adam,

Jeff just nailed it on the head.

Joe.

yes but that doesn't make sense if HD and Lowes aren't charging tax on the trees they're reselling that are produced by zills.

Adam, i think you are confusing wholesale with retail sales. An item can be sold many times on wholesale basis to different distributors, before it reaches final retail customer.

Oscar,

I called the Department of revenue again, and asked them...they said as long as u are the producer selling directly to the buyer, and the product is a edible plant, u are exempt from tax!

I don't think it matters whether it's wholesale or retail!  at least that's what they told me.

[Michael Adler]

I used to run a nursery that only sold edible plants, so I really appreciated the exemption. I didn't want to bother with calculating, collecting, and reporting sales tax. We were all volunteers and there was enough work to do already. I have not previously heard about an exemption for direct sales of agricultural products, which might have been nice too. We operated under the food exemption. Florida considers seeds and plants that produce food to be food and they are not subject to the requirement to collect and report sales tax, though I believe you can do it anyway if you want to for bookkeeping simplicity. I could be wrong about that last part. Anyway, you don't pay tax on food from the grocery store and shouldn't have to pay tax on fruit trees from the hardware store.

There was once we wanted to distribute some nitrogen-fixing legume trees to go along with our edible plants for chop-and-drop fertilizing, but there's no exemption for fertilizer for food. If I had known about the direct sales of ag products, I may have looked into that, but all the other farmers I talked to who sell some ornamentals told me they collect tax on them, so idk. Anyway, I came up with schemes like "buy five food plants and get a fertilizer tree for free" so I wouldn't have to do the tax paperwork. We never did get a tax ID.