Sales and Use Tax Responsibilities of Ag-Chemical Dealers, Cooperatives, Elevators, Fertilizer Dealers

"Production of Agricultural Products" Begins With:

  • Cultivation of land previously cleared for planting crops; or
  • The purchase or breeding of livestock or domesticated fowl.

"Production of Agricultural Products" Ceases When:

  • A product has been transported to the point where it will be sold by the producer or processed.

Exempt

  • Machinery and equipment used directly and primarily in the production of agricultural products
  • Machinery and equipment used directly and primarily in a manufacturing process
  • Replacement parts for exempt machinery and equipment
  • Computers used in processing or storage of data by a commercial enterprise (farmers cannot purchase computers tax free, but an agribusiness may be eligible for exemption)

Taxable

  • All vehicles subject to registration
  • All equipment attached to a vehicle subject to registration
  • Labor to repair exempt machinery and equipment
  • Parts not separately itemized from taxable labor
  • Grain testing
  • Grain storage
  • Pest eradication