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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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I intend to use my 10 acres to grow and sell product ( vegetables

Resolved Question:

I intend to use my 10 acres to grow and sell product ( vegetables ) by the road side or to a independent store or to a whole seller. what are the laws concerning the tax code and the health codes concerning this in Ok ? what is required of me . ?
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Robin D. :

Hello and thank you for using Just Answer,
The tax would be on your net income. This would be the income after your expenses. If you are growing the produce yourself you would use Schedule F to report the income and the expenses.
Health Codes are not under taxation so would not be relevant to any taxation of the income.

Robin D. :

If you earn money managing or working on a farm, you are in the farming business. Farms include plantations, ranches, ranges and orchards. Farmers may raise livestock, poultry or fish, or grow fruits or vegetables.

Robin D. :

Farmers can deduct ordinary and necessary expenses as business expenses. An ordinary farming expense is one that is common and accepted in the farming business. A necessary expense is one that is appropriate for that business.

Robin D. :

More information about farm income and deductions is in Publication 225, Farmer’s Tax Guide. You can download it at IRS.gov.

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Robin D. :

If you were not selling to a wholesaler or retail store you would also need to collect sales tax. Both state and local sales tax applies to the sale of produce, whether it is retailed at a farmers market or along the roadside. Resellers are exempt from paying the sales tax.

Robin D. :

You will need to register for sales tax though.
Sales tax applies when the seller is making a sale at retail to the final user or consumer, but not when the purchaser is selling the product for resale. A farmer selling products at retail at a farmers market must collect and remit sales tax. A farmer selling produce to a wholesaler is selling the produce for resale or use in manufacturing a product for sale.

Robin D. :

The buyers will give you a copy of their sales tax information and you will need to keep track of thsi information so you can show why you did not collect the sales tax.

Robin D. :

Anyone claiming a sale for resale exemption shall also keep
a record of the purchaser’s resale number issued by the Commission. The failure to obtain and keep a record
of the purchaser’s resale number shall create a presumption that the sale was not a sale for resale. The vendor
may, however, present other documentary evidence from its books and records to overcome this presumption.
[See: 68 O.S. §1365(C)]

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7315
Experience: 15years with H & R Block. Divisional leader, Instructor
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