Nurseries, Greenhouses & Florists Sales And Use Tax Guidline

Guideline

Nurseries, Greenhouses & Florists

February 2004

Rick Clayburgh

Tax Commissioner

General Application of Sales Tax

Nurseries, greenhouses and florists are retailers and must collect sales tax on sales of flowers, wreaths,

plants, shrubs, roots, bulbs, trees, seeds, fertilizer, dirt, sod, tools, pots, supplies and garden accessories.

However, there are certain products which are not subject to tax when sold to a commercial vegetable

producer or to a farmer or rancher. Additional information on taxable and nontaxable sales is provided

below.

Nurseries, greenhouses and florists also may act as contractors when they plant or transplant shrubbery,

young trees and similar items. In these cases, the application of sales tax is not the same as under normal

retail conditions. Additional information on contracting activity is provided below.

Retail Sales

Retail sales of tangible personal property in North Dakota are subject to North Dakota sales tax.

Nurseries, greenhouses and florists who sell flowers, wreaths, plants, shrubs, roots, bulbs, trees, seeds,

fertilizer, dirt, sod, tools, pots, supplies and garden accessories to final users and consumers must collect

and remit sales tax on such items.

Sales to Commercial Gardeners, Farmers and Ranchers

Certain agricultural products are exempt from sales tax when sold to commercial gardeners, farmers or

ranchers. These products include fertilizer, seeds, roots, bulbs, small trees and similar items which are sold

for agricultural purposes. The sale of garden seeds to a commercial vegetable producer is exempt while

the sale of these same seeds for a personal garden is taxable. The same is true of fertilizer. If a farmer,

rancher or commercial vegetable producer purchases fertilizer from a nursery, greenhouse or florist, the

sale is exempt from sales tax while the sale of lawn or garden fertilizer for a private garden or lawn is

taxable.

The sale of young trees and shrubs to a farmer or rancher for a wind break or wind erosion prevention is

an exempt sale since this is for agricultural use. Sales of these same products for beautification purposes

such as landscaping the farmer’s or rancher’s lawn are taxable. In cases where the sale is exempt

because the sale is to a commercial vegetable producer, farmer or rancher, the seller’s records should

indicate that the products being sold are for agricultural purposes and are exempt. The nature of these

transactions will determine whether or not the sales are for agricultural purposes and are exempt. For

example, Tax Department auditors would question a transaction in which four or five young trees were

sold to a farmer or rancher for agricultural purposes, since the quantity of the purchase does not seem

sufficient to provide an adequate wind break or wind erosion protection. However, the limited purchase

may have been replacement trees for an existing windbreak or wind erosion project and if that is the case,

the farmer or rancher should provide the seller with a statement setting out those facts and the sale would

be exempt from tax.

21823

North Dakota Office of State Tax Commissioner

600 E. Boulevard Ave., Dept. 127

701.328.3470

taxinfo@state.nd.us

Bismarck ND 58505-0599

Nurseries, Greenhouses & Florists Sales And Use Tax Guidline - 2004

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