Form Pub. Ks-1550 - Kansas Business Taxes For The Agrcultural Industry Page 4
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32• maple syrup
HOW TO REGISTER
• poultry and poultry products
• vegetables
To apply for a tax number or to register for Kansas
To be considered as farm and ranch work for hire,
Retailers’ Sales Tax, visit the Business Tax section of
the activity must be ordinary and necessary for the
our web site (). You will be linked to the
growing or raising of agricultural products or livestock.
Kansas Business Center to complete the application,
Persons engaged in farm and ranch work for hire include
receive your account number and print your registration
custom cutters, crop dusters, and fertilizer applicators.
certificate. For complete instructions about the
application process, obtain Pub. KS-1216, Kansas
NOTE: Throughout this guide we will use the terms farming, ranching
Business Tax Application Booklet, from our web site.
or agribusiness to mean anyone engaged in any of the above
enterprises and therefore eligible to claim an agribusiness exemption.
If you prefer, you may apply in person – it provides
same-day registration service. An owner, partner, or a
CAUTION: Farming or ranching does NOT
principal officer (president, vice-president, or secretary-
include the growing or raising of agricultural
treasurer) may bring the completed application to our
products for personal use, or commercial
assistance center. We will process your application,
operations such as processing food or dairy products,
assign a registration number, and issue a Certificate of
off-farm grain storage and marketing, the processing of
Registration if you have no outstanding tax liability.
lumber, the operation of a stockyard or slaughter house,
or the retail sale of farm and ranch supplies or products.
Another option is to mail or fax your completed
business tax application to our office 3-4 weeks prior to
A common misconception is that sales tax is not due
making retail sales. This will ensure that your tax account
on any item or service purchased for farm or ranch use.
number and registration certificate are issued before
This is not the case; farmers, per se, are not exempt
your first tax payment is due.
from Kansas sales or use tax. However, there are
four sales and use tax exemptions specifically for
agribusiness. These are the tax exemptions for:
SALES TAX EXEMPTIONS
1) agricultural animals, 2) farm machinery and
equipment, 3) propane for agricultural use; and, 4) soil
FOR AGRIBUSINESS
erosion prevention.
Like all Kansas businesses, persons engaged in
agribusiness may also purchase without tax those items
AGRIBUSINESS DEFINED FOR SALES TAX
that make up all or part of the taxable goods or services
produced or sold. These are the tax exemptions for:
For the purpose of applying sales tax, Kansas tax
1) resale, 2) ingredient or component parts; and, 3)
law defines farming or ranching as any activity which is
consumed in production.
ordinary and necessary for the: 1) growing or raising of
agricultural products, 2) the operation of a feedlot; or,
What follows is a general discussion of these seven
3) farm and ranch work for hire. Therefore, anyone
sales and use tax exemptions with examples of items
engaged in the production of agricultural commodities
that qualify and those that do not. Other examples are
for resale may claim an agricultural exemption. Included
in the industry application section beginning on page 9.
are farmers, ranchers, feedlots, Christmas tree farms,
plant nurseries, and the aquaculture industry – those
who are engaged in the controlled cultivation and
AGRICULTURAL ANIMALS
harvest of aquatic plants and animals.
The sales of agricultural animals and fowl (cattle,
Farming or ranching includes, but is not limited to,
chickens, hogs, ostriches, sheep, turkeys, etc.) and
such enterprises producing:
aquatic animals and plants are exempt when used in:
• bees and apiary products
• agriculture or aquaculture;
• dairy products
• the production of food for human consumption;
• fish
• the production of animal, dairy, poultry or aquatic
• forages
plant and animal products, fiber or fur; or
• fruits of all kinds, including grapes, nuts and
• the production of offspring for any of the above
berries
purposes. K.S.A. 79-3606(o)
• fur animals
• grains and feed crops
Animals purchased for pleasure or pets are taxable.
• livestock, including beef and dairy cattle, sheep,
The purchase of a horse for breeding
swine, goats or rabbits, including the breeding,
purposes or to herd cattle is not taxed. A
grazing and feeding of any or all such animals
horse purchased for pleasure or show is
• plant nursery operations, including bushes,
subject to sales tax.
flowers, grass, sod and trees
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