Bug Blog

Can Farmers Buy Beneficial Insects Without Being Taxed?

The summer is here, and so are the bugs. Many everyday citizens may not be too concerned with insect life beyond avoiding mosquito bites. However, for farmers, insects are a matter of serious concern. This is due to the fact that crops can be destroyed by insect-pests, but farmers also have beneficial insects on their minds. Beneficial insects can kill the insect-pests that threaten crops. Many farmers purchase large quantities of beneficial insects in order to help destroy many insect-pests. Most agricultural products are tax-exempt, which has been the law of the land for a long while. However, many states have strange tax laws when it comes to buying insects for agricultural purposes.

Since farming equipment is tax-exempt, you would think that insects would qualify for this exemption as they are considered workplace necessities. Sadly, not all states offer tax exemptions on beneficial insects. California, for example, does not allow for the sale of beneficial insects or earthworms without being taxed. Then again, California does give insect-farmers a break with taxes. People who farm large quantities of beneficial insects in California, are not taxed for the insect-feed that they purchase.

New Mexico, on the other hand, does not tax the sale of beneficial insects to farmers. However, in order to qualify for this tax-exemption, the insects being purchased must be used to control the populations of other insects. So if you want to purchase some insects for food, or just to scare your enemies, you will not be allowed a tax-exemption in any state, sorry.

Beneficial insects are not only great at destroying insect pests, but many of them help pollinate plant life as well. Examples of beneficial insects include the mealybug destroyer, ladybugs, praying mantises, assassin bugs and soldier beetles, just to name a few.

Do you believe that keeping the sale of beneficial insects tax-free will become a federal law at some point?