Reseller Permit Part 2
Reseller Permit Part 2. I’m Greg Martin with today’s Line On Agriculture.
Farmers and ranchers that buy or sell wholesale will need to know about a change coming to that process according to Joanne Gordon, a Tax Policy Specialist with the Washington State Department of Revenue’s Legislation & Policy Division. The department is replacing the old resale certificate with a resellers permit that you will need to apply for but there are some exceptions.
GORDON: We have created a new exemption certificate that applies to certain exemptions that farmers have from retail sales tax and also for the wholesale purchases of their feed, seed, fertilizer, pesticides.
That includes any product that the farmer or rancher uses that goes out to a consumer that does not come back.
GORDON: So we have this new exemption certificate that they would be able to use for that. Now if a farmer is registered with the department they would need to apply to us and to obtain the reseller permit and use that. But for those farmers who are not registered with us and who are not required to be registered with us they can use what we’ve titled a farmer’s certificate for wholesale purchases and sales tax exemptions.
The reason for the change was because of abuse of the certificate in that some people would purchase an item that normally would be taxed as if it was for resale and then just hang on to the item. These cases of abuse prompted the department to make the change. But there are some unusual circumstances.
GORDON: Let’s say you’ve got somebody who, let’s say they raise cattle to sell and the other part of their operation is growing alfalfa as feed. So they go out and bail that hay, well the bailing wire – if it’s for their own use in feeding those cattle that doesn’t qualify because that bailing wire is still purchased for consumption. But if they’re raising that alfalfa or that hay and they bail it and they’re selling, that would be a purchase for resale and would qualify.
The change takes effect on January 1 but Gordon says you can start anytime.
GORDON: The certificate is on our website now, it is available and farmers can start using it immediately. Folks can obtain more information by going to our website.
If you have any questions as to eligibility of a product you can check out the website or call their toll free number.
That’s today’s Line On Agriculture. I’m Greg Martin on the Northwest Ag Information Network.
