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Q:  If a seller receives an exemption certificate for replacement parts for farm machinery and equipment, must the seller verify that the farmer uses the part for farm machinery and equipment?

A: 

No. The seller is not responsible for verifying the use of replacement parts purchased by a farmer that provides the seller with a copy of the certificate. It is the farmer who must keep records necessary for the Department to verify that the part is a replacement for qualifying machinery and equipment. Farmers must pay sales or use tax on purchases that do not qualify for the exemption or when records are insufficient to substantiate eligibility.

More information
Special Notice: Replacements Parts for Farm Machinery and Equipment - Sales and Use Tax Exemption (pdf)
Agriculture guide
Related questions & answers
Does the seller need to keep a copy of the exemption certificate for replacement parts for farm machinery and equipment on file?
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