Summer is upon on and farmer's markets are popular attractions in
many cities, including Des Moines. In addition to growing optimal
produce and choosing the best location, farmer's market organizers also
need to review tax laws before setting up their wares.
The IRS recently ruled, in Private Letter Ruling 201205014, that a farmer's market is not a tax exempt organization.
The cited organization was organized by a
group of vendors that had banded together to find a place to sell their
produce and "stimulate interest in and demand for locally grown farm
products." The organization conducted the farmer's market and also
contributed food to local food banks and operated an educational booth
at the market. Members paid membership fees and vendor fees.
The IRS first found that the
organization was not qualified as a business league under Internal
Revenue Code section 501(c)(6), because the association was not
directed at the improvement of farmer's markets generally, but was
rather directed toward the business betterment of the members of the
organization. Read more at the Davis Brown Tax Law Blog.