Ag Exemption on Thernal

Is there a dealer setup to accept an ag exemption for a thermal purchase? Gotten to the point where hog damage needs more serious intervention.

What would an ag exemption do?

Not pay sales tax.

Third Coast thermal does it.

Texas sales tax law does not allow the Ag Exemption to be used for guns, ammo or optics even when used in conjunction with predator control on a Texas farm. This is directly from the Texas Comptroller's office. I was told several years ago if I allowed any sales to go without tax on an ag exemption and I was audited that the tax would be due and the ag exemption holder would be contacted and not only required to pay the tax but also charged penalties and interest for the mis-use of an ag exemption. If that failed, as the merchant I would be required to pay all those back taxes and fees.

Guess what, years later, I'm now currently in the early stages of a randomly selected sales tax audit by the state (fun!) and if I had allowed all those ag exemptions to be used over the years, there would be a ton of back taxes owed.

Any Texas dealer allowing the ag exemption is playing with fire and the comptroller doesn't play. This audit goes back 4 years and they get 100% access to every financial account, book and federal tax return I have. Don't mess with Texas.lol

Can one write off the purchase for their federal taxes? Like buying a tractor, implement, building a barn, ect.

Can you not write this off as a business expense? You have an LLC, right? I'm looking at a retirement gig in three years. Equipment rental is on my short list, thermals and chronographs included.

Can do that, yes I have an LLC.

I would rather write it off the Ag side if I could. Our accountant told us "the IRS does not come after the farm or ranch, until the farm or ranch sells."

One thing to consider if you are really trying to keep it along the books. It’s not an unreasonable stretch to write of something for depredation. However if you also use the same rifle/setup for a match. You would only be able to write off the percentage you use for ag use. Or if you starting taking the rifle to another property to shoot for entertainment then again you wouldn’t be able to write off the whole item.


This came up with my accountant father in law as I wanted to buy a bass boat for a tournament fishing business. He said you can do that but if you ever fish for fun outside the tournament trail you can’t write off the whole thing.

I wish I had a nickle for every farm and ranch I knew that had been audited.
See thread on red diesel in off topic.

In my years of experience the secret on taxes is do not get greedy.

Right!

Creative tax accounting works really well until you are caught.

I have a conservative accountant who believe in avoiding red flag deductions. She will usually contact me If I have tried to deduct one or more items that are apt to be red flags and ask me if I really want to deduct them or not. Is getting to pay one, two, three or four hundred dollars less in taxes by getting worth the risk of getting audited or even worse, getting a multi-year audit? Even if they find nothing wrong, you can be out a goodly amount of time for you and/or expenses for your accounting firm.

That is something we all need to decide for ourselves. After all, deducting the cost of an item doesn't make it free. In the grand scheme, it is more like getting it at a discounted price.

Fun example, I had a neighbor deduct a boat as a "business expense" because he used it to entertain clients. However, his Facebook account was loaded with pictures of him taking his family on water skiing on several weekends each summer. He did take clients out in the boat once or twice a year, no doubt, but the IRS dinged him on his yearly amortization and upkeept expenses on the boat going back multiple years, plus fines and late fees. Their argument was that only the outings with the clients counted as a write-off because the boat wasn't used primarily for business purposes...sort of like if you take a client to lunch in your personal car, you can't write off 100% of the cost and expense of your personal car, but you can write off the mileage for the particular outings.

Choose deductions wisely.

Keep great records
as my old boss said that bulls make money bears make money and pigs get slaughtered

a dollar of greed can cost thousands in attorney fees accountant fees and head aches

When the State came up with the wildlife exemption, I sold the cows. It’s a lot simpler and the neighbors have to worry about the fences.

There was a big discussion on this very topic on a thermal group on FB. There was a few farmers in that chat that had been audited by the IRS and it didn’t fare so well when the purchases came to light. None did prison time, but one lost the farm and the other owed a whole lot of money.