Looking for a Tn Sales And Use Tax Form Templates? Download it for free!

SALES AND USE TAX APPLICATION TO FARMING, TIMBER HARVESTING, NURSERY OPERATIONS, AND AGRITOURISM

Questions and answers regarding farm/nursery/timber harvesting equipment and machinery and repair and

replacement parts. Refer to Tenn. Code Ann. Section 67-6-207, effective January 1, 2008.

Agricultural Exemptions

1. What items are exempt from sales and use tax per the statute changes?

It would be impossible to publish a comprehensive list of all specific items. Generally, the following items are

exempt from sales and use tax when sold to qualified farmers, timber harvesters, or nursery operators.

Any appliance (including appliances costing less than $250) used directly and principally for producing

agricultural products (does not include autos, trucks, household appliances, or property that becomes real

property, such as barns, sheds, and fencing)

Grain bins and attachments

Aircraft designed for crop dusting

Equipment used for harvesting timber (does not include trailers and trucks for transporting)

Livestock trailers

Self-propelled fertilizer or chemical application equipment

Systems for environment control, feeding, watering, and egg conveyance for poultry

Replacement parts and labor for previously qualifying equipment

Gas or diesel fuel used for agricultural purposes (does not include pre-mixed gas and oil of one gal. or less)

Seeds, seedlings, plants, fertilizer, and pesticides used to produce food or fiber, including tobacco, for

human or animal consumption

Farm containers and plastic or canvas covers used in raising plants, including tobacco, for human or animal

consumption

Feed and drugs for livestock

Agri-sawdust, which includes sawdust, wood shavings, chips, and slabs

Electricity, natural gas, liquefied gas, coal, wood, and fuel oil used in the production of food and fiber for

human or animal consumption or in the production of nursery and greenhouse crops.

2. I’ve heard that for an original purchase of farm equipment to be exempt, it must cost more than $250. Do

the repair part and/or labor on the farm machinery and equipment have to exceed $250 also?

Effective January 1, 2008, the $250 threshold for farm equipment and machinery is eliminated. On or after that date,

the machinery, equipment, or appliance no longer has to cost $250 to be exempt farm machinery or equipment. In

addition, the charge for repair or replacement parts or repair labor does not have to cost $250 to be exempt.

However, the repair or replacement parts and repair labor must be for qualifying equipment and sold to a qualified

farmer, timber harvester, or nursery operator.

3. A seller charges purchasers for delivery of machinery and equipment to the farm, nursery, or forest. Is the

delivery charge taxable?

Effective January 1, 2008, a new definition of sales price was enacted. Delivery charges made by the seller are a part

of the sales price of property regardless of whether the delivery charge is separately itemized on the invoice. If the

machinery and equipment, repair or replacement parts, or other items delivered qualify for an agricultural

exemption, then the delivery charge is equally exempt.

4. I do not qualify as a farmer or nursery operator. Can I continue to buy seeds, seedlings, and plants that

produce food or fiber for human or animal consumption free of tax?

No. Effective January 1, 2008, Tenn. Code Ann. Section 67-6-207 limits the exemption from sales tax on

agricultural purchases such as seeds, seedlings, and plants to produce food or fiber for human or animal

consumption only to purchases by persons that have qualified for and received the Agricultural Sales and Use Tax

Certificate of Exemption.

Form Rv-F1308401 - Application For Registration Agricultural Sales And Use Tax Certificate Of Exemption - 2009 Page 8

Related Articles

Related forms

Related Categories