Tax question for Virginia sawmill owners

[music_boy]

      I have an option of taking delivery of my mill at the Vir. State Fair in Richmond late sept. early Oct. Anyone advise me on the tax laws on mills in your state. In Pa., where I can also pick it up, there's no tax if used on a farm, or, you sign an agreement that you will sell 10,000 bf of lumber in the coming year.
Thanks
Rick

[Gilman]

Here in Washington state you have to sign a tax exempt form stating the machine is going to be used in a manufacturing process.  In this state all maintenance parts are also tax exempt if they have a life span of over one year.  

You also might want to get a seperate sales receipt for just the trailer value for licensing purposes.  

[DR Buck]

VA is sales tax exempt for farm use equipment.  I picked mine up in PA and brought it to VA.   Had to pay sales tax on the "trailer"  to put license plates on it.

[Fla._Deadheader]

  If it was BOUGHT out of state, isn't shipping and delivery the same thing ???

[music_boy]

I tried to pay for it in Illinois and pick it up in Pa. I was told I had to pay where I picked it up. Wanted to pay for it in Pa., but pick it up in Va. cause it is a little more convenient for me. Can't do that either. (doesn't make sense to me. P_a. rep said they could take it down for me, use it as the demo, then me pick it up. But had to comply with Va. tax laws. :
     And yes, I will have to pay taxes on the trailer to put tags on it. Maryland trailers are done by weight capabilities. There is also Special equipment tags that I'm looking into as well.
     May just go to Pa. and be done with it.
Rick

[woodhaven]

Is it classed as a trailer or a piece of equipment?
I have wondered why a lot of you even worry about tags. I guess every state is differant. Here in Va. if a piece of equipment is classed as a piece of equipment you don't need tags. I always check with the state police before draging something down the road and they always say the same thing that a piece of equipment needs no tag. On the other hand if that same piece of equipment can be removed from its frame with bolts it now becomes a trailer and needs a tag. The state has always told me if it is welded together it doesn't need a tag. I bet it would become a fine line on the judgement call for a sawmill.

[VA-Sawyer]

I recently went through this myself with the state of Virginia. I was prepared to pay the 4.5 % sales tax on my mill, but found out by talking with the Dept of Revenue that I didn't have to because I took possession out of state. I had the trailer package listed as a seperate item at the time of sale. I only had to pay sales tax on the $500.00 for the trailer to get a license plate. I also have to pay "use tax" on all items ordered from WoodMizer and shipped to me here in VA.
Dr. Buck- It may be tax exempt for use on the farm, but if used as a piece of business equipment, it may become taxable. Do you operate the mill as a business not part of the farm ?

Music-Boy- Pick it up outside the state of VA and save the 4.5%. I have no idea how the state of Maryland handles sales tax. You need to check on that.
VA-Sawyer

[music_boy]

Thanks all,
     Since it is an out of state purchase, I don't have to pay sales tax. I'm pretty sure this is the case in most states unless the business is licensed to operate in the state you pay for it. I purchased some stuff from Cabelas on line from their catalogue store in MI. since they have a retail outlet in Md. I had to pay tax.  : : : Like I said, I wanted to send my payment to Illinois, but they wouldn't take it unles I picked it up there. If Virginia has no other option than the exemption for farm, then I'll pick it up in Pa. and save the tax. I put my hudson on an old boat trailer and registewred it as a homemade trailer to get tags. MVA didn't offer any info for it as a special equipment. I just didn't want the hassle.
     Do you get a "title" with your woodmizer mill? If I don't, I'll probably have to get a trailer title to register here in Md. : : : I'll have to check this out. I'll let you all know what I find out :-/
Rick

[TN_man]

You guys are mentioning taxes that I never heard of before . I hope it is TN and not just me . "use tax" wow! And to think that our nation's founders did not like having to pay less than 1% sales tax on the tea they got from England (without representation I know) We sure have come a long way :. Just my two cents worth. Jeff

[VA-Sawyer]

TN_man,
Use tax is the tax a business pays for things they buy tax exempt and use themselves instead of selling. If a lumberyard buys a load of wood to resell to retail, then they don't pay sales tax on it. They collect the sales tax when they sell it retail, and send the money to the state. If they were to use that lumber to build a new storage shed, then they have in effect "bought" the lumber for their own retail use and would have to pay the sales tax to the state for it. Because they didn't actually sell the lumber it is called a use tax instead of a sales tax.

Caution to all sawyers in Virginia....... The state has a "wood tax" for all wood harvested in Virginia. Basically it is paid by the mill on any wood cut on a business basis. The rate of tax depends on the type of wood and the volume cut in a year. One of the few exceptions is wood cut from your own property for your own use. They have a flat tax for small operations that seems to be affordable.
Next to the Zoning Board, the Tax people are the second most likely group to "blind side" you right out of business.

[DR Buck]

Music Boy,

I picked my mill up in PA this past January.  All I had to do was fill out a PA "tax exempt" form at Wood Mizer.  They had the form available.  I think it is so they can balance their books with PA on the sales taxes collected, or in my case not collected.

A few weeks after I picked up the mill, Wood Mizer sent me a PA title for the "trailer" portion.   When I transfered it to a VA title I had to pay sales tax on the trailer. It was 3.5%  of the $1200 trailer value.

 

[music_boy]

DR Buck
     Did you go farm tax exempt or say you would sell 10,000 bf o 'lumber in the coming year. I don't have a tree farm anymore so I got one way to go.
      I know in Maryland. you don't see tags on log spliters, cement mixers, and the like, even though they have lights on them. I'm thinkin a mill should be the same. I'll find out.
BTW,,,, Did they give you a temp tag to tow it home???
Rick

[woodhaven]

Yea thats the same way here in Va. If it is a piece of equipment, no tags but you do have to add lights and safty chains.

[DR Buck]

Music Boy,

I don't remember what the tax form was for.  It was a PA form.  But given the choice I would have said farm use as I operate a beef cattle farm.  I'm confused about your VA specific questions.  Your profile says you're in MD  ???

Woodhaven,

When I went to DMV to transfer the title to a VA title I was told I need to have tags on the mill.   Don't know why since it was a piece of equipment and can't be separated from the rest of the mill.   DMV didn't agree an I didn't feel like arguing so I paid the one-time fee for permanent tags (see post above).

[music_boy]

DR
     The Pa. rep offered to bring the mill to the Va. state fair if it was more convenient for me. It is, but they said since I would take delivery in Va. I was obligated to their tax laws. Hence the questions. In the bigger picture, it is not convenient as I see it now.
Thanks
Rick