Farmers and Ranchers Require Agriculture Sales Tax Exemption Number
Written by Randy Watson
Texas Farmers and Ranchers... Have you submitted your application for a Texas Agriculture and Timber Exemption Registration Number? (Ag/Timber Number.) Under a new state law passed by the Texas Legislature in 2011, commercial agriculture or timber producers will need an Ag/Timber Number issued by the Comptroller's office to make eligible sales tax-exempt purchases for their business.
Beginning January 1, 2012 in order to make sales tax exempt agricultural related purchases you must have this number. To claim the sales tax exemption from the Texas Sales tax, the item being purchased must be used in the regular course of business exclusively on a farm or ranch in the production of agricultural products or exclusively to produce timber products for sale.
How do you get your registration number? There are 2 ways to register.
Apply online at www.getreadytexas.org. It's a fairly simple straight forward application. Log in or create an account at the Texas Comptroller Office's "MyCPA" website. Once you have an "MyCPA" account you'll need basic information about your operation, such as business name, description and address, you will need your Social Security number (for internal use only). Businesses registered with the Texas Secretary of State (SOS) (Corporations, LLC's, etc.) will need to provide the file number as well. You can find it using the SOS Taxable Entity Search.
You can print a copy of your confirmation letter upon completion, or write the registration number down. Texas will mail you a confirmation later on the next business day after the application has been completed.
Or you may apply on Paper. If you prefer to apply for your registration number via a paper application, you can do one of the following:
Download the paper application from the Comptroller's website: AP-228 Application for Texas Agricultural and Timber Exemption Registration Number (PDF); or Call 1-800-252-5555 to request that a copy of the application be mailed to you.
Once complete, mail your application to the address provided on the form. Mailed applications may take three to four weeks to process, and you will not receive your number instantly (as you will through the online application). Once your mailed application is processed, you will receive your registration number in the mail.
The following items are always exempt and an Ag/Timber Number is not required:
- Horses, mules and work animals commonly used in agricultural
- Animal life, the products of which ordinarily constitute food for human consumption, such as cattle, goats, sheep, chickens, turkeys and hogs
- Feed, including oats, corn, chicken scratch and hay, for farm and
- Seeds and annual plants, the products of which are commonly recognized as food for humans or animals,such as corn, oats and soybeans) or for fiber, such as cotton seed.
What activities DO NOT qualify and are not eligible for a sales tax exemption?
- home gardening
- horse racing, boarding or training
- trail rides and zoos
- florists or similar retailers who maintain plants prior to sale
- wildlife management and conservation
- hunting and fishing operations, including aerial hunting
- predator control and/or wildlife/livestock
- censuses or surveys
- commercial fishing
- companion animal (pet) breeding and kennels
Who DOES qualify for a sales tax exemtion and is eligible for a Texas Agricultural and Timber Exemption Number?
A person, including a non-Texas resident, engaged in the production of agricultural or timber products for sale in the regular course of business is eligible for a registration number. This number can be used to claim an exemption from Texas sales tax on the purchase of qualifying items. Included for eligibility for registration numbers are persons in these groups
- farmers and ranchers who raise agricultural products to sell to others
- persons engaged in aquaculture and apiculture; (i.e. commercial fish farms or bee keepers)
- custom harvesters
- persons engaged in agricultural aircraft operations, as defined by 14 C.F.R. Section 137.3 (crop dusting)
- commercial nurseries engaged in fostering growth of plants for sale (i.e., growing stock from seed or cuttings, replanting seedlings in larger containers)
- timber producers, including contract lumberjacks