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Q:  Are custom farmers eligible for the replace parts for farm machinery and equipment exemption?

A: 

Generally, a custom farmer does not meet the definition of an “eligible farmer” and would not qualify for the exemption.  To qualify as an “eligible farmer” a person must grow, raise, or produce an agricultural product on his or her own land or have a present right of possession to the land, and generate $10,000 in gross sales of such products.

A custom farmer makes sales of his or her services rather than making sales of agricultural products. A person that merely provides custom farming services is not an “eligible farmer” and would not qualify for the sales tax exemption.

More information
Special Notice: Replacements Parts for Farm Machinery and Equipment - Sales and Use Tax Exemption (pdf)
Agriculture guide
Related questions & answers
Can an eligible farmer get a refund for sales tax paid on purchases of qualifying replacement parts for farm equipment and machinery?
Does a farmer who has not filed his or her previous year federal income tax return have to wait until the return is filed before applying for an exemption certificate?
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