Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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Agricultural and Timber Exemptions and Texas Taxes

Overview

Farmers, ranchers and timber producers can claim exemptions from some Texas taxes when purchasing certain items used exclusively to produce agricultural and timber products for sale. Click the links below to learn more about exemptions and how to claim and document them.

Who Qualifies for Agricultural and Timber Exemptions?

If you are a farmer, rancher or timber producer engaged in one of the activities listed below, you qualify for tax exemption on the purchase of certain items used to produce your agricultural and timber products for sale.

All purchasers, including non-Texas residents, must have a valid agricultural and timber registration number (ag/timber number) issued by the Comptroller to claim exemption from Texas tax.

If you do not have a valid ag/timber number, you must pay tax to retailers on your purchases.

Your business type must be listed below to qualify for tax exemption on certain items or for an ag/timber number.

What Activities Qualify?

  • farming or ranching for the purpose of raising agricultural products for sale;
  • timber production (including contract logging);
  • feedlot operation;
  • commercial fish farm operation;
  • bee keeping;
  • custom harvesting;
  • crop dusting (as defined by 14 CFR Section 137.3);
  • growing plants for sale in a commercial nursery;
  • a veterinary business that makes farm or ranch calls;
  • Future Farmers of America or 4-H; or
  • teaching an agricultural vocational course.

What Activities Do Not Qualify?

  • home gardening;
  • horse (PDF, 313KB) racing, boarding, training or trail rides;
  • rodeos, circuses or zoos;
  • florists or similar retailers who maintain plants before sale;
  • wildlife management and conservation;
  • hunting and fishing operations, including aerial hunting;
  • predator control;
  • wildlife or livestock surveys;
  • commercial fishing;
  • companion animal (pet) breeding; and
  • kennels or other animal boarding businesses.

How to Apply for a Texas Agricultural and Timber Registration Number (Ag/Timber Number)

To claim a tax exemption on qualifying items, you must apply for an agricultural and timber registration number (ag/timber number) from the Comptroller. You must include the ag/timber number on the agricultural exemption certificate (PDF, 335KB) or the timber exemption certificate (PDF, 387KB) when buying qualifying items.

Ag/Timber Number Expiration Dates

Ag/timber numbers must be renewed every four years, regardless of when the number was first issued. Renewed and new ag/timber numbers expire Dec. 31, 2019.

You must enter the expiration date on the exemption certificate you give to retailers on your qualifying purchases. If you already have an exemption certificate on file that includes your ag/timber number, you can add the expiration date to the exemption certificate and initial it for the retailer’s records.

What You Need Before You Apply

  • Basic information about your business (such as its name, description and address)
  • Social Security number (if you do not qualify for a Social Security number, you must apply by mail and include your national identification number and country of origin on the application)
  • If your business is registered with the Texas Secretary of State (SOS), your SOS file number (find your file number using our Taxable Entity Search)

Apply Online

If you don’t already have an eSystems account with us, you will first register to create a secure online profile. Otherwise, log on as a returning user. The application takes about 10 minutes to complete. No signature is required, and we will issue your ag/timber number at the end of the application process.

We will mail you a confirmation letter in five to seven business days after you complete the online application. In the meantime, you can view and print a copy of your confirmation letter (using Adobe Acrobat Reader) upon completing the registration process, or write down your ag/timber number. You can also look up your registration information at any time.

Apply on Paper

You can print the application (PDF, 165KB) and mail the paper version to us. Allow three to four weeks for processing time.

Additionally, you can call our Fax on Demand service at 1-800-531-1441, or call 1-800-252-5555 to ask for an application to be mailed to you.

Ag/Timber Courtesy Cards

Once we have processed your application, we’ll send you a confirmation letter with two courtesy cards showing your ag/timber number. These cards are for your convenience. They do not replace the requirement to provide a properly completed exemption certificate, with an active ag/timber number and expiration date, when making tax-exempt purchases.

You can make copies of the courtesy card, and you can authorize a spouse, employee or other person to use the ag/timber number to make purchases in your name.

For example, if three family members operate a farm, one member can apply for an ag/timber number for the farm and all three family members can use it when buying qualifying items. Or, a corporate agricultural or timber operation with multiple employees can obtain one card and number that can be used by all authorized employees for qualifying purchases.

You are responsible for properly using your ag/timber number, and you can be held liable for its misuse.

How to Renew Your Texas Agricultural and Timber Registration Number (Ag/Timber Number)

When to Renew

You can renew your ag/timber number between now and March 31, 2016. Your current 11-digit ag/timber number will not change, but the new courtesy cards we send you when you renew will have a new expiration date.

What You Will Need

  • Current ag/timber registration number
  • Social Security number (if you do not qualify for a Social Security number, you must renew by mail and include your national identification number and country of origin on the renewal letter)
  • Webfile/RT number, if filing online (this number is on the top right-hand side of the renewal letter)

Renew by Telephone

Call 1-844-AG RENEW (1-844-247-3639) 24 hours a day, seven days a week. Once you have completed the telephone renewal process, your ag/timber number will be renewed within two business days. We will mail you a confirmation letter and new courtesy cards in five to seven days. You can also look up your ag/timber number at any time.

Renew Online

From our WebFile page, click on “Sales Tax” and log into eSystems. Follow the ag/timber online instructions. Once your renewal is complete, you can print your courtesy cards or simply make a note of your ag/timber number. We will mail you a confirmation letter and new courtesy cards in five to seven days.

Renew by Mail

Follow the instructions in the renewal letter. You will receive a confirmation letter with your new courtesy cards in four to six weeks.

Courtesy Cards

Ag/Timber Courtesy Cards

Once we have processed your application, we’ll send you a confirmation letter with two courtesy cards showing your ag/timber number. These cards are for your convenience. They do not replace the requirement to provide a properly completed exemption certificate, with an active ag/timber number and expiration date, when making tax-exempt purchases.

You can make copies of the courtesy card, and you can authorize a spouse, employee or other person to use the ag/timber number to make purchases in your name.

For example, if three family members operate a farm, one member can apply for an ag/timber number for the farm and all three family members can use it when buying qualifying items. Or, a corporate agricultural or timber operation with multiple employees can obtain one card and number that can be used by all authorized employees for qualifying purchases.

You are responsible for properly using your ag/timber number, and you can be held liable for its misuse.

Qualifying Exempt Purchases

Sales and Use Tax

Agricultural and timber producers are not exempt entities, and not all purchases they make are exempt from sales tax.

There are, however, three ways to purchase items without paying sales tax. Some items are exempt by law, some are exempt when used exclusively for ag/timber purposes and other items qualify for a standard sales tax exemption.

Always Exempt Purchases – Exemption Certificate Not Required

The following items are always exempt, so you do not have to give retailers an exemption certificate or any other type of documentation:

  • seeds and annual plants, the products of which are commonly recognized as food for humans or animals;
  • seeds and annual plants usually only raised to be sold in the regular course of business (such as corn, oats, soybeans and cotton seed);
  • cattle, sheep, swine, goats (the products of which are ordinarily food and inspected by the USDA’s Food Safety Inspection Service);
  • chickens, turkeys, ducks, geese, guineas, squabs ostriches, rheas or emus (the products of which are ordinarily food and inspected by the USDA’s Food Safety Inspection Service);
  • horses, ponies, mules and donkeys;
  • medications, tonics, restoratives or other therapeutic preparations (such as vaccines and drenches) purchased with a prescription from a veterinarian (you must either give the retailer a written prescription from a veterinarian or allow the retailer to receive the prescription directly from the veterinarian);
  • water; and
  • feed for farm animals, ranch animals and wild game, including oats, hay, chicken scratch, wild bird seed and deer corn.

Exempt Ag/Timber Purchases – Agricultural or Timber Exemption Certificate and Ag/Timber Number Required

You must give the retailer a properly completed agricultural or timber exemption certificate showing a current agricultural and timber registration number (ag/timber number) when purchasing these items:

  • animals raised to sell as food, but not ordinarily considered food or required to be inspected by the USDA’s Food Safety Inspection Service, such as rabbits, deer, llamas and bison;
  • animals raised and shown by students and teachers in 4H, FFA and similar agricultural vocational groups;
  • fertilizers, fungicides, insecticides, herbicides, defoliants and desiccants used exclusively to produce timber for sale or on a commercial farm or ranch to produce food or other agricultural products for sale;
  • machinery and equipment (including repair or component parts) used exclusively on a commercial farm or ranch to produce food or other agricultural products for sale or to build or maintain roads and water supplies;
  • machinery and equipment (including repair or component parts) used exclusively to produce timber;
  • machinery and equipment used by an original producer for packing and processing agricultural or timber products;
  • machinery and equipment exclusively used in an agricultural aircraft operation, as defined by 14 CFR Section 137.3;
  • tangible personal property incorporated into a structure used for poultry carcass disposal;
  • components of irrigation systems used to produce food and other agricultural and timber products for sale;
  • seedlings used to produce timber for sale;
  • electricity and natural gas used in agricultural or timber operations;
  • services performed on exempt tangible personal property identified in this list; and
  • telecommunications services (as of Sept. 1, 2015) used to navigate machinery and equipment exclusively used on a farm or ranch to:
    • build or maintain roads;
    • build or maintain water facilities; or
    • produce agricultural products to be sold in the regular course of business.

Other Exempt Purchases – Sales and Use Tax Exemption Certificate Required

Some animals and their feed do not qualify for the ag/timber exemption, but do qualify for the standard sales and use tax exemption. You must give the retailer a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF, 72KB) when purchasing them. The certificate must specifically explain the exempt purpose for which the animal or feed will be used. You do not need an ag/timber number to buy them.

Work Animals – Animals used exclusively in one of the following work activities qualify for exemption:

  • herding dogs and animals raised for their products (such as wool or fur), if harvesting those products is their primary purpose;
  • aiding a person with a disability (professionally trained service animals); and
  • performing protective services, if the animal has been professionally trained for that specific purpose.

Work animals do not include animals raised, trained or kept as pets or breeding stock or those kept for sport or for show. For example, tax is due on hunting dogs or other animals a game hunting operation purchases and on exotic animals a zoo or circus purchases.

Animal Feed – Feed for work animals qualifies for exemption. Feed for animals being held for sale in the regular course of business (including dogs, cats, rabbits and exotic animals) also qualifies for exemption.

To qualify for exemption, the sales and use tax exemption certificate must clearly state the feed is for work animals, animals to be sold in the regular course of business or for breeding stock for animals that will be sold.

Pet food is taxable. Pet food prescribed by a veterinarian can be purchased tax free without a sales and use tax exemption certificate.

Motor Vehicle Sales and Use Tax

Farm and timber machines, trailers and semitrailers used primarily for farming, ranching and timber operations (including machines and trailers used primarily in poultry operations and on feedlots) qualify for exemption from motor vehicle tax.

Agricultural Exemption – Farm Machines and Farm Trailers

A farm machine or trailer is exempt from motor vehicle sales and use tax if it is used at least 80 percent of the time in one of the following ways:

  • to produce grass, food for people, feed for animals or agricultural products for sale; or
  • by an original producer in processing, packing or marketing their own livestock or agricultural products for sale.

Farm machine – a self-propelled motor vehicle specifically adapted for, and primarily used to:

  • apply plant food and agricultural chemicals in producing crops; or
  • to distribute livestock feed in raising livestock.

A self-propelled motor vehicle designed or adapted to primarily transport people or agricultural products is not a farm machine.

Farm trailer – a trailer or semitrailer designed for and used primarily on a farm or ranch.

The term “farm trailer” does not include a motor vehicle designed for sleeping, dressing, lounging, restroom use or meal preparation, even if the vehicle is used to transport livestock or agricultural products.

A farm trailer used more than 20 percent of the time to transport livestock or property to and from competitions, shows, rodeos or other similar uses does not qualify for exemption.

Pick-up truck – a pick-up truck is taxable, even if it is registered with farm plates.

Timber Exemption – Timber Machines and Timber Trailers

A timber machine or trailer is exempt from motor vehicle sales and use tax if it is used at least 80 percent of the time in timber operations.

Timber machine – a self-propelled motor vehicle specifically adapted to perform a specialized function for use primarily in timber operations, such as land preparation, cultivating, maintaining and harvesting commercial timber.

The term “timber machine” does not include:

  • crew vehicles;
  • field service vehicles; or
  • self-propelled motor vehicles specifically designed or adapted to transport timber or timber products, including those designed to transport cargo and adapted with a cargo-loading device.

Timber trailer – a trailer or semitrailer designed for and used primarily in a timber operation.

How to Claim the Exemption

To claim exemption from motor vehicle sales and use tax on the purchase of a qualified farm or timber machine or trailer, you must provide the dealer a properly completed Form 14-319, Texas Motor Vehicle Exemption Certificate for Agricultural and Timber Operations (PDF, 62KB).

The exemption must also be claimed at the time of titling or registration with the local County Tax Assessor-Collector by entering your current ag/timber number on Form 130-U, Application for Texas Title.

Farm Plates – For information on registering (or renewing registration of) a motor vehicle with farm plates, contact your local county tax assessor-collector or the Texas Department of Motor Vehicles at TxDMV.gov.

Motor Vehicle Rental Tax Exemption

When claiming exemption from motor vehicle gross rental receipts tax when you rent qualifying farm or timber machines trailers, you must enter your ag/timber number and expiration date on Form 14-305, Motor Vehicle Rental Tax Exemption Certificate (PDF, 317KB).

Motor Fuels Tax

Motor fuel is taxed when it is removed from the terminal rack. The tax is included in the price you paid at the pump. You may qualify for a refund on your gasoline purchases, and you may be able to purchase dyed diesel fuel tax free.

You cannot use your agricultural and timber registration number to purchase motor fuel tax free.

Gasoline

You cannot purchase gasoline tax free; however, you can apply for a refund (PDF, 195KB) of tax paid on gasoline used in off-highway equipment such as tractors, mowers and generators.

Learn more about gasoline tax.

Diesel

For state tax purposes diesel fuel is sold in two forms: clear and dyed.

  • Clear diesel is subject to the state highway fuel tax and is intended for highway use.
  • Dyed diesel is not subject to the state highway fuel tax and is intended for off-highway use.

All purchases of clear diesel fuel are taxable, including clear diesel fuel used in off-highway equipment such as tractors and combines. There is no tax exemption or refund when you purchase clear diesel fuel.

Dyed diesel fuel used to power non-highway equipment, such as tractors or combines, can be purchased tax free directly from your fuel supplier. You are not required to have a state fuels tax license when your supplier pumps the dyed diesel directly into the fuel tank of your off-highway equipment. The fuel supplier must maintain the required fuel records and documentation to verify the purchase.

If you purchase dyed diesel in bulk (fuel supplier delivers dyed diesel into your storage tank), then you will need to apply for one of the following:

Learn more about diesel fuel tax.

Exemption Certificates

Ag/Timber Exemption Certificates for Sales and Use Tax

Exemption Certificates

When you purchase an item that is not exempt from tax by law, you must give the seller an exemption certificate to purchase the item tax free. The type of exemption certificate depends on the type of item you are purchasing and how it will be used.

Retailers are not required to accept an exemption certificate. If they choose not to accept an exemption certificate from you on a qualifying item, you must pay the tax and then request a refund of the tax paid from the Comptroller.

Any items you buy tax free must be used in an exempt manner. Otherwise, the exemption will be lost and you will have to pay tax, penalty and interest on those items.

Ag/Timber Exemption Certificates for Sales Tax

An agricultural or timber exemption certificate is required when you claim a sales tax exemption on the purchase of items directly used to produce agricultural and timber products being raised or harvested for sale.

You must give the retailer a properly completed agricultural or timber exemption certificate that includes your current ag/timber number and expiration date when purchasing qualifying items.

Agricultural – For purchases of items (PDF, 107KB) used exclusively on a commercial farm or ranch to produce food or other agricultural products for sale, you must give the retailer a Form 01-924, Texas Agricultural Sales and Use Tax Exemption Certificate (PDF, 335KB).

Timber – For purchases of items (PDF, 101KB) used exclusively to produce timber products for sale, you must give the retailer a Form 01-925, Texas Timber Operations Sales and Use Tax Exemption Certificate (PDF, 387KB).

Sales and Use Tax Exemption Certificates

Some animals and their feed do not qualify for the ag/timber exemption, but do qualify for the standard sales and use tax exemption. You must give the retailer a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF, 137KB) when making these purchases. The certificate must specifically explain the exempt purpose for which the animal or feed will be used. You do not need an ag/timber number to buy these items.

You cannot use Form 01-339, Texas Sales and Use Tax Exemption Certificate to claim an agricultural or timber exemption.

Blanket Exemption Certificates

When you buy items that qualify for tax exemption, you can give one exemption certificate to the retailer at the time of your first qualifying purchase. The certificate will cover that purchase and all future qualifying purchases. The retailer must keep that “blanket” exemption certificate on file.

When you purchase exempt items later, the retailer must stamp, write or print a statement on the invoice that says the items will be used for exempt purposes. For exempt ag/timber purchases, the stamped invoice must also include your ag/timber number, expiration date and signature.

All blanket exemption certificates given to retailers for qualifying ag/timber items must be updated every four years with your current ag/timber number expiration date.

Motor Vehicle Sales and Use Tax Exemption Certificates

Farm and timber machines, trailers and semitrailers used primarily for farming, ranching and timber operations, including machines and trailers used primarily in poultry operations and on feedlots, qualify for exemption from motor vehicle tax.

Motor Vehicle Tax Exemption – To claim exemption from motor vehicle sales and use tax on the purchase of a qualified farm/timber machine, trailer or semitrailer, you must give the dealer a properly completed Form 14-319, Texas Motor Vehicle Exemption Certificate for Agricultural or Timber Operations (PDF, 62KB).

The exemption must also be claimed when you title or register the vehicle with your local county tax assessor-collector. Use the Form 130-U, Texas Application for Title, and enter your current ag/timber number on that form.

Motor Vehicle Rental Tax Exemption – To claim exemption from gross rental receipts on the rental of qualifying farm/timber machines and qualifying farm/timber trailers, enter your agricultural and timber registration number (ag/timber number) and expiration date on the Form 14-305, Motor Vehicle Rental Tax Exemption Certificate (PDF, 317KB) you give to the motor vehicle rental dealer.

Required Plug-ins

In 2015, the Texas Legislature passed House Bill 855, which requires state agencies to publish a list of the three most commonly used Web browsers on their websites. The Texas Comptroller’s most commonly used Web browsers are Microsoft Internet Explorer, Google Chrome and Apple Safari.

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