Since we're working on taxes, and I'm just sitting here waiting for numbers to be given to me...thought I'd toss this out here.
We are trying to get an Ag Exemption on our property. As you know, we have 5 acres. We have dairy goats, fiber goats, chickens and horses - but the horses do NOT count as Livestock here in Texas (it's stupid, but the idiotic Arabian breeders back in the '80s screwed everyone over, what with their "Arabians are Investments!" campaign. :sigh: Anyway....). Our property taxes Right Now are $3,500 PER YEAR. WITH the Homestead Exemption. (And taxes are gonna keep going up and up and up...and my property? Is NOT worth what they have it appraised for. I can't sell it for the $200K they seem to think it's worth. :sigh: Plus, I only paid $20K for the land - in CASH, so I *own* the property, and really shouldn't have to pay taxes on something I own 100%...I don't pay taxes on my shoes once I've bought 'em..but, again, that's beside the point.)
Sweet Geek went to the Appraisal office to see what we needed to do to qualify. Bear in mind, we are using the chickens and goats to help us become more self-sustaining; we give away a lot of the excess eggs (and what we "sell" doesn't even *begin* to cover feed costs.....we "sell" for donations, and most people won't donate as much as they would pay in the store. It's....nevermind.) and will be using the milk for drinking/cheese-making/ice cream - basically ALL of our dairy needs; the excess will be used in soap. (According to them, we are a "Hobby Farm"...UNLESS we don't make a profit. If it's just for personal use, you're screwed, tax-wise. :sigh:)
Anyway, according to the Appraiser, our 5 acres is "too small" to qualify for most Ag Exemptions. IF we had 20 goats, and IF we could prove a profit 5 out of 7 years, than we *might* qualify. Chickens? Don't even come into the picture. (For the record, most of the properties I looked at that *were* Ag Exempt - including our former Home - had NO animals at all on them, and hadn't had any for YEARS. Got that? The people would toss a cow or a pig out there just long enough to qualify, then get rid of them. The property we own now was Ag-Exempt, and hadn't had a cow on it in 15 years. So.......) (The 20 goat part I am OK with; we'll buy some Boers and keep them well away from the dairy goats, AND we'd eat them. IF we had to keep 20 on the property, I'm still OK with it, for the record. I'd prefer to NOT have to, but I don't mind. We DO have the space, and it's not being used right now - the horses won't eat what the goats will, so they won't be competing for food...anyway.)
I think this is absolutely crazy.
My accountant friend suggested we claim a profit from "sales" of soap. Not a large profit - just $500 or so a year. Pay the State Sales taxes, AND the Federal Income and Self-Employment taxes, and see if that would qualify us. Bear in mind....we'd be claiming a profit that we probably would NOT be seeing. (In this economy, I honestly don't see anybody paying $5 for a bar of soap. But that's another story...) (Don't wanna go the "sell the goat meat" route - that'll bring in the FDA. Don't believe me? What if we sell a goat to good 'ol Johnny, and he gets food poisioning from the Potato Salad his wife made, but sues *us*, claiming it was the goat.....yeah. So not going *that* route!)
Sweet Geek's first response was "No. That'd be lying!"....well......yeah, but WHO is it hurting? I mean, I would be paying taxes on money that I didn't actually *make*...so.......(which, that part broke his brain, I think. He actually stopped and *thought* about it, but didn't come up with anything. So, for the moment, we're not going this route. For the record.)
Here's the deal. Until we get some form of Ag Exemption, we can't get a Tax-Exempt Certificate so we don't have to pay sales tax on Ag-Use items (like - feed. Or Medication. Or fencing supplies. You get the picture.) I see a LOT of folks getting horse feed tax exempt.....which.....I don't understand. Since horses aren't Ag-Exemptable, UNLESS they are "used for Agricultural purposes. Rentals, lessons, etc. DO NOT QUALIFY" according to the Appraisal office. (Yes, they're using the number that they got with the exemption for cows or whatever. But STILL.....) I don't mind paying the sales tax - but I don't think it's fair. (So what else is new?)
IF we went the soap route, I would have to buy the supplies, and I would have to track expenses. I would also have to.....make receipts to "prove" the profits. (That's the sticking point with me.......the profit part.) I *will* be making soap anyway, so keeping track of expense receipts isn't a big deal. I'll be making large batches, as well - we'll be swimming in milk soon, and it'll HAVE to be used in some way. So proving cost of goods sold won't be any problem at all. (In other words, the money WILL be spent on the soap, regardless. It's the income I won't be able to prove, since, well...there won't BE any/many sales. Friends might buy some, but not enough to make a true profit.)
So, my question to the masses: What you *you* do? I've been racking my brain to see what Torah says.....and I'm not coming up with anything. I'd be claiming a non-exsistant profit, which means I'd be paying TOO MUCH in taxes to the gov't......we ARE using the land for Ag purposes - we're NOT going to get an exemption then sell the animals - that *would* be wrong. (I'm not trying to justify this, or get people to agree with what I want to do - I honestly want opinions here. At this point, we're not doing anything. I'd like to - I'd LOVE to cut my property taxes down a couple of thousand a year, but NOT if it's honestly against Torah.) I'd like some "outsider" views on this. (And I'm not really worried about the tax-exempt portion - if we get it, great, if not, no biggie. We're not talking *that* much in sales tax, to be honest - maybe $40/month. I really don't know - I don't track that.)
So. Discuss. I want your real views. Also, bear in mind that I am NOT talking about cheating on my taxes - the whole point of this is that IF we went this route, we'd be paying in MORE taxes then we would actually *owe*. NOT underpaying. I want to make that point perfectly clear. I am NOT against paying taxes I owe - I'm just trying to find a way to get an Ag Exemption that I quite honestly feel we qualify for - I am NOT trying to underpay the gov't. The whole "Render unto Ceasear what is Ceasear's" thing? Yeah, so NOT trying to not do that. (And I already try to "render unto God what is God's", so that part's covered. IF I did make a profit, God would DEFINATELY get His portion FIRST, before the gov't.)