Sales Tax Slice: Sowing and Growing for Spring

Garden Center

Some parts of the United States are still getting battered by snowfall, and forlorn residents stuck in the gloom and doom of winter may be looking forward to getting back to gardening for spring. Activities like gardening have been found to help maintain physical and mental health, according to the Centers for Disease Control and Prevention. Whether you have an expansive outdoor vegetable garden, a window planter box, or a few indoor plants, states vary on how they tax your green thumb.

For those just starting out by purchasing seeds or plants, states such as New York, New Jersey, and Pennsylvania will impose a sales tax on your purchases. However, New York exempts sales of seeds or plants that are used or consumed predominantly in farm production. New Jersey has a similar exemption for seeds or plants sold to a farmer for use directly and primarily in the production of agriculture at a farming enterprise. Pennsylvania also has a sales tax exemption for sales that become a constituent of a farm produc.

Other states, like California, will exempt seeds or plants that produce food ordinarily for human consumption from sales tax, regardless of whether they are used in agricultural production. So seeds for Swiss chard and summer squash in a home vegetable garden are exempt from sales tax in California, but marigold and flower seeds are not. Similar to California, Florida offers a tax exemption for sales of plants that produce food for human consumption. However, Florida residents benefit from a sales tax exemption on all seeds, whether they produce food or flora.

For those wanting to improve an existing garden with fertilizer or weed killers, these types of products are also categorized and taxed differently depending on the state.  In New York, sales of fertilizer, mulch, soil, or pesticides are taxed unless purchased for predominant use in farm production. In New Jersey, sales to farmers for use and consumption directly and primarily in the production of agricultural commodities are exempt from tax. However, California taxes pesticides and soils, while exempting fertilizer applied on products that are to be used as food or products sold in the course of business. Meanwhile, Florida extends a sales tax exemption to fertilizers and weed killers when applied to home vegetable gardens.

No matter where you live, gardening provides an activity to help you shake off those winter blues and welcome spring. For residents of the northeast, try to be patient until the last freeze ends, whenever that may be.

Continue the discussion on Bloomberg Tax’s State Tax Group on LinkedIn. Should all states extend sales tax exemptions for agriculture to products used for home gardens?

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