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Iowa law (Iowa Code §§422.45(26) and (39)) exempts from sales tax the gross receipts from the sale or rental of farm machinery and equipment if the items are used directly and primarily in livestock or dairy production. That raises a question as to whether certain items associated with a confinement hog facility are eligible for the exemption. That was the question raised in this case.
To constitute a gift, the donor (person making the gift) must intend to make a gift, deliver the gifted property to the donee (recipient of the gifted property), and the donee must accept the gift. Also, when circumstances are uncertain, the donor’s intent controls. Here, the plaintiff received an inheritance and used some of it to purchase a tract of real estate, but placed title to the property in his girlfriend’s name because he was unsure whether a settlement of an outstanding child support obligation barred his former wife from getting a lien for the pre-settlement balance.
The plaintiff is a Minnesota corporation that removes cholesterol from beef and sells the resulting product. The plaintiff’s sole supplier was a Canadian company. In May of 2003, the USDA closed the border to Canadian beef products due to concerns related to bovine spongiform encephalopathy (BSE – a.k.a. “Mad Cow Disease”). The border closing resulted in a shutdown of the plaintiff’s business while it secured an alternative supplier.
In June 2005, the U.S. Supreme Court ruled that the Beef Promotion and Research Act which created the beef check-off was government speech and, as a result, the program could not be challenged constitutionally on First Amendment grounds by those opposed to mandatory program. While the Court’s opinion is highly questionable (even supporters of the check-off always referred to it as a private, self-help program), what is of greatest concern is how far the government speech doctrine could be expanded based on the Court’s opinion.
In most states, the common law bars one person from maliciously interfering with another person’s business. That’s the rule in Iowa. A person cannot act with the sole purpose to injure or financially destroy another person’s business relations. Since 1991, several states have gone further and enacted legislation designed to protect perishable food products from false and malicious statements. This case did not involve food disparagement, but it did involve a farmer’s claim that a bank intentionally interfered with his business relations.
Most people are dependent on borrowed money or financing for continuing in business or for major purchases, such as a home. That is true for farmers and non-farmers alike. Typically, a lender requires the borrower to sign a written agreement giving the lender legal rights to the collateral (such as the borrower’s crops, livestock or equipment) if the borrower fails to repay the loan. The type of a lending arrangement is known as a “secured transaction” and is subject to a specific set of rules that govern the rights and obligations of the parties to the transaction.
We begin 2006 with our annual look at the most significant agricultural law developments of the previous year. Legal issues continue to be at the forefront of developments that are shaping the present and future of American agriculture, and it is very likely that the involvement of the legal system in agriculture will continue to grow. The following is my list of what I view as the top ten agricultural law developments of 2005 based on their impact (or potential impact) on U.S. agricultural producers and the sector as a whole.
This publication is designed to acquaint you with the considerations, problems, and tools available in estate planning. It has been updated to include 2005 revisions to the tax law.
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.