| (e) All medications, tonics, restoratives, or other therapeutic preparations for farm and ranch animals that are used exclusively on a farm or a ranch are exempt from sales and use tax. See
subsection (d) of this section regarding exemption certificates. (f) A farm or ranch is defined as one or more tracts of land used, either wholly or in part, in the production of crops, livestock, and/or other agricultural products held for sale in the regular course of business. This includes feed lots, dairy farms, poultry farms, commercial orchards, commercial nurseries, and similar commercial agricultural operations. Farm or ranch does not include home gardens or timber operations. (g) The terms machinery or equipment include: (1) expendable supplies, such as hand tools, baling wire and binders twine; (2) lubricants for farm machinery and for motor vehicles not licensed for highway use; (3) nuts, bolts, washers, and other hardware. It also includes materials used on or in buildings, structures, or structural components that are classified as machinery or equipment;
(4) repair or replacement parts used exclusively on farm or ranch machinery or equipment. This includes tractor tires, tires used on motor vehicles not licensed for highway use, and tires specifically designated by the manufacturer for farm use or off-highway use only; (5) machinery and equipment used exclusively to maintain equipment that qualifies for exemption under this section; (6) those items specifically designed to be assembled into a machine, such as parts of a pumping system or portable irrigation systems; (7) tangible personal property sold for use as a component of an underground irrigation system; (8) fenceposts, cattleguards, gates, and chutes. However, fenceposts, gates and cattleguards used to enclose private driveways, home lawns, gardens, pools, etc., do not qualify for exemption from tax. These items purchased by persons operating commercial nurseries and greenhouses and
similar commercial operations for the purpose of preventing trespassing by the public do not qualify for exemption from tax; and (9) the following items and the materials used to build, construct, or fabricate these items (these items are classified as equipment and are therefore exempt), provided they meet the qualifications set out in this section and have not been previously excluded: (A) fences, pens, gates, cattleguards, and chutes used in connection with raising livestock or production of agricultural products; (B) storage facilities specifically designed for and that can be used only to store bulk fungible commodities regardless of whether the facilities are of a portable or fixed nature. Typical facilities on farms or ranches include petroleum products storage tanks, grain storage bins, refrigerated storage structures for unprocessed fruit, silos, and vehicle-mounted fertilizer spreaders or feed mills (not licensed for
highway use). General purpose facilities that are used to store bulk fungible commodities, farm produce or equipment do not qualify for exemption from tax. Only those facilities that cannot be used for any purpose other than the storage of fungible goods qualify as farm equipment; (C) a building or structure that is essentially an item of equipment or machinery necessary for agricultural production if it is specifically designed for such use and cannot be economically used for any other purpose. For example, automated laying houses, farrowing houses, and commercial greenhouses. (h) Sales tax is due on the sale of computer hardware for use on farms and ranches unless specifically designed as a part of production equipment, such as a computer-operated feed mixing device. Computer software that is designed specifically to aid in the production, processing, packing, or marketing of agricultural products of the original producer qualifies for
exemption. Computer software used for, but not limited to, household budgeting, payrolls, bookkeeping, educational, or recreational purposes is taxable. (i) Buildings and structural components and/or the materials used to build, construct, or fabricate the following facilities are not exempt from the limited sales and use tax. (1) Buildings include any structures or edifices enclosing a space within their walls, and usually covered by a roof, the purpose of which may be to provide storage, shelter, or housing, or to provide working, office, or sales space (for example, houses, offices, barns, storage facilities, warehouses, garages, and stores). (2) Structural components include those parts of a building or machinery in, on, or adjacent to a building, relating to the operation or maintenance of the building (for example, air conditioning or heating systems). However, if the sole justification for installation is to meet
humidity or temperature requirements essential for the operation of other machinery or the processing of plants, animals, or foodstuffs, the structural component is exempt. (j) Ice used on agricultural products. (1) Sales or use tax is not due on ice used to remove field heat from agricultural products. (2) Sales or use tax is not due on bunker ice, top ice, or any ice placed on transportation facilities by growers. For example, ice used inside or outside crates of lettuce to cool the lettuce while being shipped is exempt. (3) Sales or use tax is due on the subsequent icing after the initial icing for the purpose of preservation prior to sale except by the original producer, as that term is defined in subsection (b)(1) of this section. (k) Sales or use tax is not due on ice exclusively used by commercial fishermen on commercial fishing boats in the storing of aquatic species, such as
shrimp and other crustaceans, finfish, mollusks, and other similar creatures.
|
