Field burning exemptions expired December 31, 2010
The sales and use tax exemptions for purchases of specific equipment by qualified farmers to reduce field burning expired December 31, 2010. Beginning January 1, 2011, sellers must collect and remit sales tax on these sales. See our special notice Sales Tax Exemption to Reduce Agricultural Burning Expires.
Use the right exemption certificate when purchasing replacement parts
Farmers with a Farm Replacement Parts Certificate issued by the Department of Revenue are entitled to a sales tax exemption for purchases of replacement parts for farm machinery and equipment and certain related services.
To get the sales tax exemption on purchases of replacement parts, the farmer must give the seller a copy of their Farm Replacement Parts Certificate. Do not use other documents, such as a reseller permit, the Farmer’s Certificate for Wholesale Purchases and Sales Tax Exemptions, to claim the exemption. Farmers who provide the incorrect exemption certificate or dealers that accept them are liable for the unpaid sales tax.
This exemption is limited to charges for:
- Parts that replace an existing part, or which are essential to maintain the working condition, of a piece of qualifying farm machinery and equipment;
- Installing replacement parts for qualifying farm machinery and equipment; and
- Repairing qualifying farm machinery and equipment.
For more information about the replacement parts exemption and how to renew or apply for the Farm Replacement Parts Certificate, please refer to our special notice Repair Parts and/or Services for Farm Machinery and Equipment – Sales and Use Tax Exemptions.
Documentation required for different farming exemptions clarified
Exemption certificates are being used improperly to document sales tax exemptions. Farmers using incorrect exemption certificates and sellers accepting them are potentially liable for the unpaid sales tax. To help clarify, the Department has developed a matrix that explains which exemption certificate to use when making eligible purchases.
Reminder: Nutrient management exemption suspended until July 1, 2013
Purchases that would have otherwise been exempt under the livestock nutrient management exemption are now subject to sales tax. Before the exemption becomes effective again on July 1, 2013, the Department will issue new exemption certificates to those farmers that currently have them. For more information, please see our special notice Livestock Nutrient Management Equipment Sales Tax Exemption Suspended.