How to Become Farm Tax Exempt

Eligibility

Eligible properties must comprise at least 10 acres. Christmas tree farms are an exception, with a minimum of five acres and $1,000 of farm income reported for three of the prior five years. The land must be used to raise crops, manage or breed livestock, or produce nursery stock or useful plants. It can also be used for grazing, forestry, dairying or horticulture and certain forms of aquaculture. If at least one-half qualifies as agricultural, the entire property can gain that designation. Non-agricultural for-profit businesses on the property, and any idle land, can't be designated as agricultural.

Obtaining Farm Exemption

Contact your county assessor's office for an application for a farmland exemption. It must be filed annually by a specific date. If the farm use of the property changes, you must notify the assessor within six months. The assessor makes the decision as to whether or not your property is legitimately agricultural. Factors in the decision include zoning, such as a farm located in an area zoned residentially. South Carolina taxes privately owned farmland assessed properties at an annual rate of 4 percent of use value, compared to 6 percent of fair market value of other real estate. However, corporate-owned agricultural land is taxed at 6 percent of use value.

Sales and Use Tax Exemption

Farmland status holders can apply to the state Department of Revenue for a sales and use tax exemption. Qualifying farmers get an agricultural tax exemption certificate. With this document, you can buy farm-related tangible personal property such as livestock feed, fertilizers and pesticides. It also includes machinery, fencing, fuel and construction materials as long as they're used in your operation.

Agricultural Exemption Certificate

You must present your agricultural exemption certificate to the seller when you buy eligible items. With each purchase, you must list on the certificate all tangible personal items that qualify for the exemption. If the seller has your exemption certificate on file, you must note tax-exempt items on the invoice. You assume all liability for anything that isn't exempt under South Carolina law. If the property isn't used for agricultural purposes, you must file a state tax return and pay any taxes due.

Fertilizers and pesticides. It also includes machinery, fencing, fuel and construction materials as long as they're used in your operation.