06/08/06 Mistakes in parts exemption applications

Washington Ag June 8, 2006 Eligible farmers need to have a certificate from the Department of Revenue to get the exemption on sales tax for approved machinery replacement parts that takes effect July 1st. Joanne Gordon with the Revenue department says applications are coming in slower than anticipated and some don't have all the required documentation. She says farmers must document they had at least 10-thousand dollars in gross sales of agricultural commodities they produced in the previous year. Gordon: "What the legislation specifically identifies is Schedule F of the 1040 form or form 1120 of what they file with the Internal Revenue Service. We will deny the application if it comes without documentation and we have gotten several of those that have not come with the right documentation." And Gordon says gross sales is not the same thing as income from farming. For example, crop insurance receipts. Gordon: "While it may be farming income it is not income for purposes of qualifying them for the exemption. Another one is Conservation Reserve Program payments. That does not make them eligible for the exemption." Exemption certificate application forms and information are on Revenue's website at www.dor.wa.gov I'm Bob Hoff. (Farmers who do not have Internet access can call 1-800-647-7706 to obtain applications.)