I think (Disclaimer),
that you have to have a minimum number of acres,
and your farm has to produce a certain amount of income each year.
Otherwise it is just a hobby farm.

Pooh Bear

Your tax person, or an accountant, may be able to tell you what both your state, and the Federal gov't, require for agricultural classification. They can be pretty strict about it, so do double check. Try your county's agricultural extension agent also, as he/she may know - look in the phone book under county offices.

Your county extension agent can be a source of lots of information.
I think the IRS considers you a "farm" if over 1/2 your gross income is from farm sources. I don't believe total acres farmed has anything to do with it.
I'm not sure why you think it is important to have any classification as a farm per se. Anybody can raise a few chickens and sheep if they have the space and facilities. I am assuming you don't intend to make your total income from farming. You can have all the garden crops, or animals you want, a "farm" is only a vague descriptive term. Whether you have 2 acres or 2000.

If you can get it, and if you meet the restrictions/definition, you can get an agricultural exemption, and pay less property tax. It may also apply to income taxes. Because it means less income for the county (and state if income tax is covered), they scrutinize them fairly closely - I know of someone who lost his in NC for giving away hay instead of selling it.

I live in Pennsylvania, which might have a few local rules other states may not?/ But there are working farms here of less than 1 acre on up to hundreds of acres. Being in an area zoned as agriculture is a reaL BENEFIT! But there are exemtions& exceptions to that too. Not being in a properly zoned ag area can lead to some serious problems in land use,with neighbors, et cetera.
Filing farm taxes is sometimes not as good as it may seem at first, sure you can claim losses and capital expenses, but you also have to claim profits and do a lot more paper work. We quit the farm tax stuff several years ago and just do the underground economy thing! Cash in, cash out.

Most states a;;ow a certain amount of ag sales without any need of inspections and you can slide under a lot of BS type stuff. There are generally pretty strict rules on processed foods tho such as jams, prepared meat products, baked goods and so on.
heres my tip,, stay away from most animal enterprises and go for veggies, fruits, berries if you want to make a few bucks. Thats from 40 years of experience on a small operation, which sometimes wanted to be a big time operator!
Tap into some internet resources such as ATTRA( appropriate technology transfer for rural areas. there is a lot of help for small farming out there.

ksfarmer and fancifowl pretty much hit the nail on the head! (Again!) A lot of the "farm" classification depends upon the state and county you live in. If you are in a zoned county/state it may depend on the number of acres you own/rent and it's zoning classification. In my state (Missouri) there is no general requirements other than those imposed by county authorities. (Counties here are both zoned and unzoned. Local inniative type thing. My county is unzoned, so anyone living outside of an incorporated town can consider himself to be a farmer, even if all he raises are cockleburs and thistles.) The most deciding factor is the percentage of income derived from the farming business in relation to the total household income. This too can be very deceptive because your first years in the business you might be operating at a deficit. (Paying off start up costs, loans, and depreciation of equipment/property.)

One thing that you must realize before you begin handling/raising livestock is the new requirements for premises and animal registration. Many small farmers are dead set against it, and in many ways rightly, but the idea is to improve tracking of livestock from birth to death. The reasoning behind this was the recent cases of BSE. As you are planning on raising sheep you will definetly need to consider this as my understanding is that all hooved animals must be microchipped for individual identification, and that all poultry must have a registration per flock. If it works the way most detractors predict it will, you will not be able to sell, transport or have processed any animal that is not individually/flock identified, and if you are found to not have proper premises registration you could also face fines for failure to register. I recommend you review the information available at your state Ag Department website to see what they say on the matter. Right now it is being billed as "voluntary", but eventually it will be mandatory. I know your question was about what it took to be considered to be a "working" farm, but there is no one single way of answering your question because it has too much depending upon your local area, and the requirements of the federal government.

As of now, sheep & goats that go to a County or State Fair, must have ear tags for id and a vet certificate of health. Not microchips.

Poultry must have been tested for certain diseaes and have leg bands or owners of large flocks will have a flock certificate.

If you keep your animals at home, you usually are not required to tag them.

There are some national programs for disease control, and they are tracked by the government. They are voluntary so far if you do not move your animals off your farm.

M

M, the problem is most people who produce livestock do so with the intention of either selling offspring for an extra income source, or having some processed into usable meat. If you do not follow the guidelines set out by the government, whether it be microchipping or ear tagging, you might be turned back at either the sale barn or the locker plant. (Also, ear tagging will probably go "bye-bye" because of the problem of tag loss or fraud by unscruplous sellers/exhibitors. Look for either microchipping or lip tattooing to become the standard.) Right now there is even concerns over horse owners transporting horses to shows and trail rides. For years most states have had requirements for current negative Coggins tests on horses, as well as, health certificates on animals that are being shown or exhibited, but what I am talking about is animals being bought, sold, and raised for meat, milk and egg production.

As stated by others, you will have to do your due diligence for your particular area, and in my experience, your particular tax assessor who has subjective latitude in their application of the rules. At my local Ag Extension office there is a person who has a great deal of experience and is helping me, as is a local real estate attorney who is very well versed in the process as well.

My tax assessor told me she 'hates all these little farms trying to get out of paying property taxes' and that I had to be engaged in a 'serious farm endeavor to expect the tax reduction'.

On the topic of animal identification, here is a site dedicated to the topic, and you might find interesting:

Here is a link that might be useful: Animal ID

Makevinb,

I was stating what is required now. I attend sales & auctions and as of now in New York, they do not require a microchip.

As you stated, possibly in the future, they will require a more permanent form of id other than an ear tag.

Right now, to transport a horse there isn't a requirement for a permanent id, just proof of a Coggins test within the previous 2 years with a description of the horse & markings.

Goats & sheep only need an ear tag. Poultry need a leg band from the government or a flock health certificate. Usually at local auctions, these aren't enforced.

M

That is the problem, each state is taking the animal id/premises registry on it's own terms. The rules in Missouri are different from the ones in Kansas. It won't be long before the feds step in, and everything is uniform, and probably much tighter.

To give an idea of the labyrinth of livestock regulations. At one time Missouri recognized certain counties as being Brucelosis (Bangs) free zones. These counties had no requirement for cattle bought, sold or transported out of those areas to have any form of health certification stating that they were bangs free or came from a bangs free herd, while those in other areas had to have such certification. A number of years ago the problem with Bangs became so wide spread the testing/certification became statewide. While it is not observed as strictly on individual to individual sales, it is strictly enforced at all sale barns, and by anyone transporting cattle into or out of the state. (For those of you unfamiliar with it, Bangs/Brucelosis is a disease that is transmittable to humans through milk. When we get it, it causes Rheumatic Fever. In cattle it causes spontaneous abortion. It is sexually transmittable within the bovine species, and might even be transmittable between domestic cattle and bison. Bison are known harborers of the bacteria that causes the illness.)