Jason Smith finally received the news he had been waiting 10 months to hear. Judge Alan Zaunbrecher, of the 22nd Judicial District Court, ruled Smith and his family are exempt from sales taxes for beef they sell direct off their Louisiana farm. It has been a long, hard-fought battle, and one Smith said has been confusing from the very beginning.
The retired veteran told DTN he still recalls the day last year when he was served and ordered to pay upward of $40,000 in taxes for selling beef direct off the family farm in Washington Parish. It went against everything he had been told about state law, which exempts farm products there from sales taxes.
"It's been going on since September," Smith told DTN. "Farm products, sold off the farm, are exempt from sales tax in Louisiana. But the sheriff, who is also the tax collection authority here, filed this lawsuit against my family." Smith added they are not the only farm in the county selling beef direct, so he is unclear why they have been targeted by the sheriff.
Today Smith is happy for the verdict, telling DTN he hopes the matter is closed for good. Asked if he thinks the sheriff will appeal, Smith surprisingly said maybe he should.
"If he really believes in his case, and needs clarification on the English language, then he should appeal," Smith said. "Otherwise, he should admit that he cynically brought this case forward in a shameless attempt to generate revenue by publicly apologizing and offering to pay my legal expenses."
The plaintiff here is Sheriff Randy "Country" Seal. The "Country" is an addition, evident on the legal documents he filed against the Smiths, and even on ballots for this elected position he has held since 2011. Seal has been voted into office three times now, with his current term expiring at the end of June 2024, according to the Washington Parish Sheriff's Office website. DTN reached out to the sheriff to ask about the case but had received no response by publication time.
REASONS FOR THE JUDGEMENT
The judge in the case wrote that the question the court was to determine was whether a tax exemption on the sale of agricultural products applied to the defendants individually and as Angus Lane LLC. The Smiths sell beef and lamb direct. The court held that while the statute in question did not specifically define "farm products" when interpreted for its plain meaning, it would include processed meats. The court held that the broad terms "farm products" would include both livestock and livestock products.
The judge wrote: "The court further finds that the slaughtering and packaging of the raw meat is not manufacturing because that process does not alter the essential natural quality of the product. Additionally, the testimony of Jason Smith, the manager of Angus Lane, LLC, clearly established that the livestock is raised on the company's property and the animals are transported by it to a USDA approved facility which slaughters and packages the meat and returns it to Angus Lane, LLC. Angus Lane, LLC is clearly the producer of the farm product, i.e., the raw meat, in its unmanufactured state, and sells its farm products from its farm directly to consumers."
FOLLOWING THE RULES
Jason Smith and his family appear to have done everything by the book. Smith, who retired from the military and came back to the family farm in 2016, said they slaughtered their first animal under the farm's label at the end of 2019. When COVID hit in 2020, they hit the ground running.
In 2020, he said, they earned about $40,000 from the direct sales; and in 2021, that number grew to $55,000. It's more than half of the farm's revenue now, and one that Smith said has the highest potential for growth.
"It took me a couple of years to get going," he told DTN. "I had to figure out how to adopt more management-intensive grazing, so I spent a lot of time putting in electric fences and taking out barbed wire. I put in water lines and looked at the shade in different areas. Then, we took time to grow out animals and see how we could get a consistent product. It just happened to coincide with the pandemic."
Smith explained the operation processes its own beef at a USDA-approved facility in nearby Summit, Mississippi. It is sold under the Smith Angus label to consumers, retailers and restaurants.
The lawsuit, which was aimed at the family members, not the LLC, has been hard on Smith's parents he said.
"The truth is this has not stopped for the last 10 months," Smith said. "It's actually generated a lot of publicity and business for us, but it's a strain on my parents. They are in their 70s and 80s, and they don't want their kid to be sued. We've spent about $5,000 so far that I wish we still had in our bank account. It's just one more thing to deal with, and one that never should have happened because we've followed the law."
Victoria Myers can be reached at firstname.lastname@example.org
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