by Bill Whittle & Gordon E. Groover

Historically, farmers have not paid sales tax on many purchases used in agricultural production, nor have they been concerned with collecting sales tax because they have sold a commodity product to a wholesaler or middleman. Now, however, many Virginia farmers have entered into the realm of “Direct Marketing” by face-to-face or Web-based sales directly to the customer via roadside stands, their websites, farmers’ markets, U-pick sales, and community supported agriculture (CSA). The items sold may include produce, meats, further processed foods (for example, jams, jelly, and jerky), hay, farm crafts, and other products. This is in contrast to traditional wholesale sales of farm products, such as live cattle at an auction market, and/or grain sales to a local elevator. These items are then further processed or combined with other commodities for final sale to the “end-user” or the person consuming the good.