1. Farm Equipment O.C.G.A. 48-5-41.1 (old style and new style)

2. Joy to the world….  O.C.G.A. 48-5-41.1  ( c )( 1 ) As used in this subsection, the term ‘lease purchase agreement’ means a financing agreement under which:

3. Joy to the world….  O.C.G.A. 48-5-41.1  (A) a family owned qualified farm products producer has possession and control of farm tractors, combines, or other farm equipment other than motor vehicles equipment and uses such farm equipment directly in the production of agricultural products; AND

4. Joy to the world….  O.C.G.A. 48-5-41.1  (B) The payments made pursuant to such financing agreement are credited towards the purchase of such farm equipment

5. Joy to the world….  O.C.G.A. 48-5-41.1  (2) Farm tractors, combines, and all other farm equipment other than motor vehicles, whether fixed or mobile, which are owned by or held under a lease purchase agreement and directly used in the production of agricultural products by family owned qualified farm products producers shall be exempt from all ad valorem property taxes in this state.

6. Case Lease

7.  Hours are being leased (600)  Overage billed at approximately $60  Length ( 02-28-2014) thru (02-28-2015)  1 year  1payment of $13,500  $13,500 / 600 hours = 22.5 dollars per hour  They are leasing hours not buying this machine

8. Case Lease Lease buy out option is $227,000! Was the lease payment in this case applied to the purchase price?

9. Case Lease

10. This could go on and on. IN this particular lease, it wouldn’t be a smart financial move to exercise your lease purchase option since you can buy a tractor with fewer hours for less money.

11. Lease Purchase Agreements Look at this black and white kitty!

12. Lease Purchase Agreements Banana anyone?

13. Lease Purchase Agreements No worries, batman is here to save the day.

14. Lease Purchase Agreements POINT: Just because someone calls a document a lease purchase doesn’t make it a lease purchase agreement.

15. Center Pivots

17. This is why they are called center pivots - rotate

18. Center Pivots Watch for real property that may be taxable

19. Center Pivots Watch for real property that may be taxable

20. Center Pivot Lease Purchase Zimmatic is a leader in center pivot irrigation

21. Center Pivot Lease Purchase

22. 1.60 month Lease 2.5 Payments 3.Buy out option of $8,000 4.Total Lease payments are $43,963. 5.Equipment Cost is $40,429. 6.Makes sense = true lease purchase agreement.

23. Center Pivot Lease Purchase Additional Example

24.  60 Month Lease  6 Payments that total $33,000  Lease purchase option of $5,000  Equipment cost of $33,000  Makes sense = True Lease Purchase Agreement  Plus-how many times have you witnessed a center pivot being removed? LOL.

25. Additional Tractor Lease Lease Payments in the amount of $44,000

26. Additional Tractor Lease Let’s check the market The lease purchase option will save the farmer money.

27. Additional Tractor Lease Let’s check the market The lease purchase option will save the farmer money.

28. Additional Tractor Lease  24 month lease  6 Payments that total $44,000  Lease purchase option of $162,000  Equipment cost of $204,000  Market on the Tractor north of lease purchase option  Makes sense = True Lease Purchase Agreement

29. Agricultural Services  Fertilizer  Seeds  Sprays  Sales  Retail  Freeport Level 2  Wholesale  Freeport Level 1

30. Question  Would a John Deere skidder held under a ‘lease purchase agreement’ be exempt to the owner (lease company, Deere Credit)?

31. Question  WHY?

32. Answer  Know No. You must understand the farm products law completely. Timber is specifically excluded as a qualified farm product. Timber equipment is taxable.