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

5. I am not a farmer, but, in the past, I have purchased items such as wood shavings and bales of hay to use

in my small horse stable and rabbit cages. Will I be able to purchase these items without payment of sales tax

after January 1, 2008?

No. Persons that do not meet one of the criteria cannot make tax-exempt purchases for agricultural purposes.

Shavings and hay (usually wheat straw) used for bedding or as absorbent materials continue to be subject to tax.

These items are not specified in the statute as exempt and do not fit within any of the categories of exempt items

under the new law. Agri-sawdust is exempt from tax when purchased by qualified farmers or nursery operators.

6. My wife and I own a couple of horses stabled in another county. We ride only on the weekends. A couple

of years ago, we bought a horse trailer tax-exempt. We are planning to buy another trailer next year. Will it

be exempt ?

On or after January 1, 2008, only qualified farmers that have been issued the new agricultural exemption certificate

can buy the livestock trailers exempt from the sales tax. Livestock trailers purchased by non-qualifying persons are

subject to sales or use tax.

7. I just paid $300 for tarpaulins or plastic to cover my round bales or hay stacked in a field. Can those items

be purchased tax-exempt?

Yes; if purchased by a qualified agricultural certificate holder, plastic and canvas coverings, including tarpaulins,

can be purchased for use (1) in the care and raising of plants, seeds, or seedlings; (2) for cover for agricultural and

horticultural products, including hay; and (3) to cover a silo or grain bin or other similar structures are exempt from

tax.

8. Are flat bed trailers used principally to transport seed, fertilizer, etc., to the farm; farm commodities to

market; or transport of move farm equipment from farm to farm exempt from the sales tax as farm

equipment?

No. The definition of farm equipment is limited to equipment or machinery used directly or principally in the

production of a farm commodity. Here, the trailers are not used directly in production. The common drop pin farm

wagon used to haul hay from the field and the silage or grain wagon used to transport silage to the silo or grain to

the grain bin are considered exempt farm equipment used directly in production. However, on-road trailers do not

qualify as exempt farm machinery except for livestock trailers, which are specifically included in the statute.

9. I am a qualified farmer and am buying corral panels. These come separately in 12-foot lengths. The panels

sell for $25 each. The gates come in 8-foot lengths and sell for $40 each. The panels and gates can be chained

together. I buy the panels and gates separately according to the configuration that I need. Can the panels and

gates be purchased tax-exempt?

Yes. Te portable corral panels and gates will qualify as appliances used directly and principally to produce an

agricultural product. 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

equipment and machinery.

10. Can a farmer or nursery operator buy a lawnmower on an agricultural exemption certificate?

It is extremely rare that a lawnmower will qualify as tax-exempt farm machinery. However, it is true that a

lawnmower, when adequately documented and used directly and principally in the production of an agricultural

product, may be tax exempt. The nursery operator may have a better case for exemption because of the need to trim

the area where trees are planted.

11. Can I purchase a farm truck exempt from sales or use tax?

Form Rv-F1308401 - Application For Registration Agricultural Sales And Use Tax Certificate Of Exemption - 2009 Page 9