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

20. I bought two rear tires for my farm tractor. Included in the price are line item charges for water and

methanol and a fee for pumping the mixture into the tire. What is exempt?

The tires and the labor to install the tires on qualifying machinery, including the pumping fee, can be purchased tax

exempt by a qualifying person. The fees for pumping the water and methanol into the tires are considered part of the

sales price of the repair labor even if the pumping fee is separately itemized. However, water and methanol, like

other liquids, such as oil, antifreeze, and transmission and hydraulic fluids, continue to be subject to tax.

21. Is adaptive equipment, such as radios or additional lights, that is installed on qualified farm machinery

exempt from tax?

Generally, the addition of new parts of this type where a similar part did not previously exist is taxable. However, if

the part replaced an existing part on qualified farm equipment, it is exempt from the tax when purchased by a

qualified person.

22. I buy chains, cables, fasteners, nuts, bolts, and shear pins to replace those that break on my qualified

farm and timber harvesting equipment. Are these exempt from the sales tax?

Yes. When these items are purchased by a qualifying farmer, timber harvester, or nursery operator as repair or

replacement parts for qualified machinery, the items may be purchased tax exempt.

23. Is exemption available for smaller items such as link bars, stabilizers, lug nuts, draw bars, blades for hay

mowers and bush hogs, hoses for hydraulically operated equipment (to adapt the equipment to the tractors

hydraulic system), disc or bog blades, plow points, etc.?

As long as these things are used to repair or replace an existing part on qualified equipment, the items can be

purchased exempt from tax by a qualified farmer, timber harvester, or nursery operator.

24. I am having my tractor painted. Are the paint and labor taxable?

Paint, primers, and the labor to apply these to qualified farm machinery and equipment can be purchased by a

qualified farmer, timber harvester, or nursery operator exempt from tax.

25. Can lubricants and other liquids that will be used in qualifying machinery be purchase tax exempt by a

qualified farmer, timber harvester, or nursery operator?

No. It is important to keep in mind that liquids (oil, antifreeze, transmission and hydraulic fluids, solutions for rear

tires, greases, etc.) are not exempt even when sold to a qualified farmer, timber harvester, or nursery operator. These

items continue to be subject to tax and were not available for agricultural exemption prior to the law changes.

26. Are wrenches, sockets, jacks, air compressors, grease guns, welders, and similar items used to repair farm

equipment considered exempt under the new amendment?

No. The exemption extends only to qualified farm machinery and equipment and subsequent repair parts and repair

labor to such equipment. It does not extend to tools or equipment used to repair or maintain the machinery. An

exception is found in welding rods and the wire for wire feed (MIG) welders, used to repair farm equipment and

machinery. The welding rods and wire for wire feed (MIG) welders are exempt because they become part of the

repaired equipment.

Energy Fuel

27. What is the sales tax rate on energy (electricity, natural and propane gas, coal, firewood ) purchased by a

farmer or nursery operator on or after January 1, 2008?

Effective January 1, 2008, the previous 1.50% state tax on electricity, natural gas, liquefied gas, coal, and wood used

directly in the production of food and fiber for human or animal consumption or to aid in the growing of

Form Rv-F1308401 - Application For Registration Agricultural Sales And Use Tax Certificate Of Exemption - 2009 Page 11