CA withholding tax on out of state pollination income
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  1. #1
    Join Date
    Nov 2009
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    Shoshone County, Idaho
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    568

    Default CA withholding tax on out of state pollination income

    Isn't there a per hive tax in CA for bees brought in from other states?
    If so, what is the amount?

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  3. #2
    Join Date
    Jun 2010
    Location
    Fresno Ca USA
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    146

    Default Re: Pollination prices

    Slow down there, lets not give California any ideas.

    There is no "per hive tax" that I am aware of, however, growers, agents and brokers are required to withhold Calif. State tax of 3% when the gross amount paid to out-of-state contractors (bee pollinators) for services or rental of hives exceed $1,500.

    You are to receive a form 1099 showing the total amount earned and the amount of tax withheld. The point of all this is to have all those out of state busineses pay taxes to California and file a "non-resident tax return.

    Source: Calif. Revenue and Tax Regulation Section 18662-5
    Last edited by Barry; 02-04-2011 at 09:44 PM.

  4. #3
    Join Date
    Nov 2009
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    Shoshone County, Idaho
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    568

    Angry Re: Pollination prices READ NOW!

    Shouse,
    I knew I read it somewhere but just couldn't remember where (think it is that middle aged thing again)!?
    They definitely WANT a part of your "ALMOND MONEY NOW!"
    I found this in my Feb. ABJ under the Honey Report (West Region):

    "The state of CA has passed legistration that will levy a 7% tax on income derived in the state from pollination services on out-of-state hives. The new law is meant to collect tax from Non-residents who do not submit a CA tax return.
    In Addition, all colonies may be assessed a one dollar per hive fee under the CA Apiary Research Commission law, but this must be approved by beekeepers representing 65% of eligible colonies assessed in CA, according to the Dec. issue of the USDA National Honey Report."

    I think this will definitely put a Big Hurt on out of state bees going to the almonds!! s s

    I will keep my bees in Idaho producing honey Thank You!

  5. #4
    Join Date
    Jun 2010
    Location
    Fresno Ca USA
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    146

    Default Re: Pollination prices

    My Bad you are correct it is a 7% withholding tax unless you file a waiver, form 587 or 588 or 590-P (whichever applies). 3% is for sales of real property by out of state owners.

    Remember that this is a witholding tax on income you earn in Ca. When you file your non residence CA tax return you apply this witholding tax to the tax you owe CA. If you owe less you receive a refund. You would not report the CA earnings on your ID tax return and therefore not pay ID state tax. So you either pay CA or the state you live in, tough break for those that live in TX or Fl.

    But basicly you're correct "we'r screwed".

    I do not believe the per hive "fee" ever pass. You're required to register your bees within 30 days of coming to California. Depending on the county your bees are in, you pay a registration fee. In Fresno county it's just $10.00.
    I seem to remember about 20 yrs ago there was a $0.03 per hive fee to study the African bees.

    Californa Almond growers needs your hives!
    Last edited by Shouse; 02-02-2011 at 11:35 AM. Reason: typo

  6. #5
    Join Date
    Jul 2006
    Location
    Pennsylvania/Florida
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    466

    Default Re: Pollination prices

    But in the End if we do pay more taxes to CA, won't we just raise the prices to the CA growers?

  7. #6
    Join Date
    Jun 2010
    Location
    Fresno Ca USA
    Posts
    146

    Default Re: Pollination prices

    Yep! about $0.80 per hive.

    Here's a very, very, simple example of how the Calif. Withholding tax works.

    Assume you bring 1,000 hives to Ca. you rent them at $140.00 to Almond growers.

    1,000 hives X $140.00 + $140,000.
    The grower withholds 7% (ouch) that's $9,800.00 (double ouch)

    You will be required to file a Calif. Non - Residence tax return.
    Assume your next profit for renting the hives is $40.00 per hive or a total of $40,000. Tax on $40,000 is about 2% or $800.00 therefore you would receive a refund of $9,000.00 that's the good news, the bad news is that Calif. held on to YOUR $$$ for a year! There are ways to legally avoid that too, but thats a long story.
    If you pay state income taxs where you live you would not report the Calif. income on your residence state return.

    So it is not as bad as it all sounds.
    Last edited by Barry; 02-04-2011 at 09:44 PM.

  8. #7
    Join Date
    Mar 2010
    Location
    Lindley, NY,USA
    Posts
    194

    Default Re: CA withholding tax on out of state pollination income

    I;m not a pollinating beek but as a rule I believe everybody is already getting the most they think they can for every contract. It's not like people like to leave 3 to 7% on the table because they don't need it.
    Fred

  9. #8

    Default Re: CA withholding tax on out of state pollination income

    According to our tax guy, we need to file a CA income tax return and the taxes owed will be adjusted by the expenses associated with that CA income. We will get a refund, hopefully large enough to justify the hassle, within the time you normally get a state income tax refund, I assume a couple months max. The tax we pay in California is adjusted on our Wisconsin state taxes, but we do report that income to Wisconsin as well.

    Sheri

  10. #9
    Join Date
    Jun 2010
    Location
    Fresno Ca USA
    Posts
    146

    Default Re: CA withholding tax on out of state pollination income

    If your paying double state tax on the same income in Calif and Wisconsin, it is time for you to fine a new "tax guy".

    The problem with the Calif. Withholding is they withhold it in January/February 2011 and you don't file the 2011 tax return until 2012. Calif keeps your withholdings for a year.
    Last edited by Barry; 02-04-2011 at 09:44 PM. Reason: excessive quoting

  11. #10
    Join Date
    Sep 2004
    Location
    Monte Vista, CO 81144
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    Default un-enforcable

    It was my understanding that it was up to the broker of the out of state beek to collect and report. You can claim expense against this tax. If you broker is a broker at all they can dodge this faster than a polatician dodges a question. Pollenation of almonds is on its way out anyway.

  12. #11
    Join Date
    Jul 2000
    Location
    NE Calif.
    Posts
    2,606

    Default Re: CA withholding tax on out of state pollination income

    >>>>Pollenation of almonds is on its way out anyway. <<<

    Why would you say that? Do you know something I don't know? Just curious..

  13. #12

    Default Re: CA withholding tax on out of state pollination income

    Quote Originally Posted by Shouse View Post
    If your paying double state tax it is time for you to fine a new "tax guy".
    Paying double tax was my concern as well. He said we wouldn't pay double tax, but we report the income and the tax paid is credited away. If we didn't report it at all I imagine a comparison to our federal income would really look out of wack. I guess the path is irrelevant as long as I don't double pay.

    And yeah, taxing entities keeping that money for over a year is the problem with any withholding, isn't it? For some reason they think this is the only way they'll get paid. No trust, lol.

    Simplyhoney, how would they avoid it? (I am looking for any loopholes you might know about!) The state is leaning on the brokers pretty hard to withhold these payments. Once they are on the radar I imagine it wouldn't take much to enforce this. If you were doing business in CA would you really take a chance on owing that much money to the state? One broker we both know files his paperwork from his home state, maybe a bit easier for him.....they might have to go after the growers that give him the money to get into his pockets.

    I suppose we should all be happy they aren't going retroactive on this.
    Sheri

  14. #13
    Join Date
    Mar 2009
    Location
    Poplar Bluff, Missouri, USA
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    2,309

    Default Re: CA withholding tax on out of state pollination income

    Another fly in the ointment is that CA keeps your money for a whole year, and you get a refund. But if CA is broke, they've already spent your money, how long will you have to wait for a refund, or an IOU??? s
    Regards,
    Steven
    "If all you have is a hammer, the whole world is a nail." - A.H. Maslow

  15. #14
    Join Date
    Jan 2011
    Location
    austin, tx
    Posts
    39

    Default Re: CA withholding tax on out of state pollination income

    Quote Originally Posted by loggermike View Post
    >>>>Pollenation of almonds is on its way out anyway. <<< Why would you say that? Do you know something I don't know? Just curious..
    Plant geneticists have created a self pollinating almond tree that they have started to test. In pre-trial tests it's as effective at pollinating itself as insect pollinators are the current version of trees, and it viable twice as long.

    http://www.ars.usda.gov/is/pr/2010/100406.htm

  16. #15
    Join Date
    Jul 2000
    Location
    NE Calif.
    Posts
    2,606

    Default Re: CA withholding tax on out of state pollination income

    Oh that. Well its a long way from 'starting to test' to not needing bees for pollination. The USDA is always announcing some wonderful thing that never pans out in reality.

    I put my first hives an an almond orchard in 1977 and am sure I will be doing it for the rest of my life!

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