Update on NCDOR regulations on farmers and registration

I posted here about how the NC legislature had made it a bit harder on farmers by requiring them to register for sales tax even if they didn’t collect the tax.

Well there has been an update and its good news. I have posted the entire email thread below for your information.

Great news! Yesterday the NC Department of Revenue released guidelines regarding the new law on specialty markets. In a nutshell: Farmers who sell only the products that they produce on their own farm DO NOT HAVE TO REGISTER.

“In sum, farmers market vendors do not have to obtain a NCDOR certificate of registration to sell their own products at farmers markets, so long as the vendors are selling only their own farm products. If vendors are reselling any farm products grown by another farmer, they must obtain a certificate and remit the appropriate amount of tax to NCDOR. The change does not revise the new requirement that farmers market operators keep a daily registration list of vendors.”

Please read Jake’s explanation below. Yeah!

From: Jake Parker
Sent: Thursday, February 13, 2014 12:02 AM
To: Debbie Hamrick
Subject: NCDOR changes re: farmer’s market registration

Debbie,

As we discussed, the NC Department of Revenue (NCDOR) issued new guidance yesterday afternoon regarding the General Assembly’s recent revisions to the State’s specialty markets law. Those revisions, as you know, imposed new requirements on farmers market operators and vendors.

Under the revised statute, N.C.G.S. 66-255, farmers market operators are now required, among other things, to maintain a daily registration list of vendors that includes each vendors’ name, address, and NCDOR certificate of registration regardless of whether the operator leases or merely provides space to vendors. Until this afternoon, NCDOR was interpreting the statute to require farmers market vendors to have a certificate of registration, even if the vendors were exclusively selling their own farm products, which are exempt from sales tax.

Yesterday afternoon, NCDOR updated its “Specialty Markets, Flea Markets, Fairs, Festivals, Sporting Events, Entertainment Events, and other Events Sales and Use Tax Information and Requirements” webpage to clarify the responsibilities of certain farmer vendors under the law. An excerpt from the revised webpage appears below. The full webpage may be accessed at: http://www.dornc.com/taxes/sales/specialty.html.

Excerpt from NCDOR’s “Specialty Markets” information and registration webpage:
“A farmer that only sells farm products produced by the farmer is not required to obtain a Certificate of Registration. A farmer that purchases products for resale that are not produced by the farmer in the capacity of a producer is required to obtain a Certificate of Registration. See Sales and Use Tax Technical Bulletin Section 9 for more information.

In sum, farmers market vendors do not have to obtain a NCDOR certificate of registration to sell their own products at farmers markets, so long as the vendors are selling only their own farm products. If vendors are reselling any farm products grown by another farmer, they must obtain a certificate and remit the appropriate amount of tax to NCDOR. The change does not revise the new requirement that farmers market operators keep a daily registration list of vendors.

Please feel free to forward this information along to anyone you know who may be interested in the matter. As always, let me know if you have questions.

All the best,

Jake

Jake Parker
Legislative Counsel & State Legislative Director
North Carolina Farm Bureau
PO Box 27766
Raleigh, NC 27611
(919) 987-1244 (o)
(919) 605-5603 (c)
Twitter: @jakeparkerjr

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Dan is a dad, a husband, a business owner, a pilot, a sailor, a scuba diver, a machinist, a gunsmith, a welder, a woodworker, a day laborer, a teacher, a mentor and a writer. The short form of all the previous is he's a farmer.

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