Horticultural services for farmers

Income earned from horticultural services performed for farmers is reported under the Service and Other Activities business and occupation (B&O) tax classification. Retail sales tax is not due on these services.

You are considered the consumer of the items that you use to provide these services such as fertilizers, spray materials, and baling wire. You must pay sales or use tax on these items.

What are horticultural services?

Horticultural services include services related to the cultivation of vegetables, fruits, grains, field crops, ornamental floriculture, and nursery products.

Examples of horticulture services performed for farmers include, but are not limited to the following:

• Soil preparation services such as plowing or weed control before planting.
• Crop cultivation services such as planting, thinning, pruning, or spraying.
• Crop harvesting services such as threshing grain, mowing and baling hay or picking fruit.

Itemized sales of products

If you separately bill for items you use to provide horticultural services to farmers, and the farmer provides you with either a reseller permit or Farmer’s Certificate for Wholesale Purchases and Sales Tax Exemptions (PDF), then those sales are taxable under the Wholesaling B&O tax classification.

If the farmer does not provide one of these documents, then the sale is taxable under the Retailing B&O tax classification, and you must collect sales tax from the farmer.

You may use your reseller permit to purchase items used to perform horticultural services since you are reselling them to the farmer.