Tax exemption legislation for 4-h and ffa livestock prize money moving forward gas quality


Legislation declaring FFA and 4-H livestock awards to be tax-free cleared a House subcommittee on this week. House Bill 3081, by state Rep. Joe Dorman, provides that "any payment received by a person as an award for participation in a competitive livestock show event" will not be considered taxable income under Oklahoma law. Under the legislation, those payments will instead be treated as scholarship awards.

"Students don’t make money on the animals they show," said Dorman, D-Rush Springs. "This is truly an educational opportunity given to these kids and it’s ridiculous to require some 16- year-old 4-Her or FFA student to file taxes on a prize." The checks received by students involved in competitive livestock shows can range from a few hundred dollars at local events to tens of thousands at national events.

Carolyn Doyle, FFA Sentinel for the Elgin FFA, told state lawmakers the bill would allow students to make their dollars stretch further. "Most of the kids in our FFA chapter pay for their animals and feed, and any money we make at a show is usually the only income generated to pay for our projects," Doyle said. "If we have to pay income tax on those awards, we won’t be able to do as much. FFA students are not getting rich off our projects and we want to be able to do more with our limited resources."

By declaring the prize money will be treated as a scholarship and therefore tax exempt under state law, legislators will indirectly exempt the prizes from federal taxation as well because of an existing federal tax exemption for scholarships and awards.

"The federal tax code clearly exempts scholarships and awards," Dorman said. "House Bill 3081 will dictate that these livestock show prizes will be classified as Scholarships and Awards and, therefore, nontaxable at both the state and federal level. That doubles the benefit for Oklahoma’s FFA and 4-H students."

watched an old smallville episode last night about clark not being able to save lana’s life. he asked jor-el to help him, but jor-el said it would cost him the life of someone he loved and was required to "balance" things. turns out, it was his dad.

tax revenue, or income, that’s it. when you start giving exemptions, an adjustment will arise elsewhere, usually at an artificial level. every exemption makes the system more arcane, and thus harder to undo. we need to be focusing on undoing it, lowering taxes so people can do a more efficient job at redistributing wealth than the government does. government can not resist playing favorites, thus pitting people against each other to remain in power. same old tricks. subsidies and tax breaks are rain. allowing the kids to be taxed teaches them about their government. insulating them from this only encourages expectation to reinforce an everexpanding system of fraud. the sooner they realize the benefit of paying taxes for relevant and constitutionally guided government, the better. no use teaching them they need a handout. every time there is a tax break or subsidy, a cascade of except when’s occurs. it makes the tax code grow. private solutions for redistribution are ok, like the NWSS solution. the government is not needed for this.

i might add, that the number of kids that would exceed the minimum to file a return does not seem threatened with proceeds from showing steers. this seems like an exremely narrow targeted bill with little real benefit. i think the number is around $8700 dollars. if you are dependent on your parents tax return, this number is lower, 5350.

We ran into problems with this a few years back. The first year my son made the premium sale at Tulsa, H&R Block filed his taxes and we paid what they said he owed. The next time he made the sale, he got a little over twice as much as the first time, but this time when they filed his taxes, he paid less than the first time. They are H&R Block, so I trusted them and wrote the checks. About a year after we filed the second time, we got a notice that he still owed twice as much as we’d already paid, so off to h&r I went. They gave me a phone number and wished me luck… The first gal I talked to was clueless. Try to explain what a "premium" auction is to a city slicker! After a few attempts at clearing things up, I finally got to talk to a young lady that knew exactly what I was talking about.. no explanation needed. According to her, my son shouldn’t have had to pay anything and she said we could file a correction to get the money we’d already paid back. I thanked her and we never had any more problems. I never tried to get the money we’d already paid back.. figured I’d already talked to the one irs employee that understood what I was talking about, and I didn’t need ask for trouble. Glad to hear they might be trying to clarify some guide lines.

I’d like to hear more discussion on this issue. I realize the premiums get huge at some of the majors, but I think the kid that wins it ought to keep it… all of it. Am I crazy? It’s always been my understanding that they changed this to try to deter some of the cheating.(I could be wrong about that) Has it helped? Our premium auctions in OK aren’t the pay day they are in TX and some of the bigger shows, so it’s not something anyone has tried to take away from the kids yet. I’d also have to agree that the kid that won should at least be guaranteed a full scholarship!