California Code of Regulations › Title 18 - Public Revenues › Division 2 - California Department of Tax and Fee Administration- Business Taxes (State Board of Equalization- Business Taxes, See Ch. 6 and 9.9) › Chapter 4 - Sales and Use Tax › Article 3 - Manufacturers, Producers, Processors › Section 1533.1 - Farm Equipment and Machinery

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) General. Commencing on and after
				  September 1, 2001, section
				  6356.5
				  of the Revenue and Taxation Code partially exempts from sales and use tax the
				  sale of, and the storage, use, or other consumption in this state, of farm
				  equipment and machinery, and parts of farm equipment and machinery purchased
				  for use by a qualified person to be used primarily in producing and harvesting
				  agricultural products. The terms "farm equipment and machinery," "parts of farm
				  equipment and machinery," "qualified person," and "producing and harvesting
				  agricultural products" are defined below.
For the period commencing on September 1, 2001, and ending
					 on December 31, 2001, the partial exemption applies to the taxes imposed by
					 sections
					 6051
					 and
					 6201
					 of the Revenue and Taxation Code (4.75%), but does not apply to the taxes
					 imposed pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on January 1, 2002, and ending on
					 June 30, 2004, the partial exemption applies to the taxes imposed by sections
					 6051,
					 6051.3,
					 6201,
					 and
					 6201.3
					 of the Revenue and Taxation Code (5%), but does not apply to the taxes imposed
					 pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on July 1, 2004, and ending on
					 March 31, 2009, the partial exemption applies to the taxes imposed by sections
					 6051,
					 6051.3,
					 6051.5,
					 6201,
					 6201.3,
					 and
					 6201.5
					 of the Revenue and Taxation Code (5.25%), but does not apply to the taxes
					 imposed or administered pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on April 1, 2009, and ending on
					 June 30, 2011, the partial exemption applies to the taxes imposed by sections
					 6051,
					 6051.3,
					 6051.5,
					 6051.7,
					 6201,
					 6201.3,
					 6201.5,
					 and
					 6201.7
					 of the Revenue and Taxation Code (6.25%), but does not apply to the taxes
					 imposed or administered pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on July 1, 2011, and ending on
					 December 31, 2012, the partial exemption applies to the taxes imposed by
					 sections
					 6051,
					 6051.3,
					 6051.5,
					 6201,
					 6201.3,
					 and
					 6201.5
					 of the Revenue and Taxation Code (5.25%), but does not apply to the taxes
					 imposed or administered pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on January 1, 2013, and ending on
					 December 31, 2015, the partial exemption applies to the taxes imposed by
					 section 36 of article XIII of the
					 California Constitution and sections
					 6051,
					 6051.3,
					 6051.5,
					 6201,
					 6201.3,
					 and
					 6201.5
					 of the Revenue and Taxation Code (5.50%), but does not apply to the taxes
					 imposed or administered pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on January 1, 2016, and ending on
					 December 31, 2016, the partial exemption applies to the taxes imposed by
					 section 36 of article XIII of the
					 California Constitution and sections
					 6051,
					 6051.3,
					 6201,
					 and
					 6201.3
					 of the Revenue and Taxation Code (5.25%), but does not apply to the taxes
					 imposed or administered pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
For the period commencing on January 1, 2017, the partial
					 exemption applies to the taxes imposed by sections
					 6051,
					 6051.3,
					 6201,
					 and
					 6201.3
					 of the Revenue and Taxation Code (5%), but does not apply to the taxes imposed
					 or administered pursuant to sections
					 6051.2
					 and
					 6201.2
					 of the Revenue and Taxation Code, the Bradley-Burns Uniform Local Sales and Use
					 Tax Law, the Transactions and Use Tax Law, or section
					 35 of article XIII of the
					 California Constitution.
(b)
				  Definitions. For purposes of this regulation:
(1) "Farm equipment and machinery" means
				  implements of husbandry, which include:
(A)
				  Any new or used tool, machine, equipment, appliance, device or apparatus used
				  in the conduct of agricultural operations, except where such items are intended
				  for sale in the ordinary course of business. Such items include, but are not
				  limited to, combines, harrows, tractor implements, agricultural heating and
				  cooling equipment, fuel storage equipment, wind machines, handling and packing
				  equipment and conveyors, ginning equipment, feeding, watering and waste
				  disposal systems for livestock, incubators and equipment used for egg and
				  poultry production, harvesting trays and bins, farm tools such as rakes and
				  hoes, plant support equipment such as trellis systems, irrigation systems,
				  fencing systems, milking systems, agricultural operating structures, squeeze
				  chutes, portable panels, corrals, loading chutes, veterinary instruments, free
				  stalls, cages and tack items such as saddles and rope. Farm equipment and
				  machinery also includes any equipment or device used or required to operate,
				  control, or regulate machinery not limited to computers, data processing
				  equipment, and computer software, including both operating programs and
				  application programs. Farm equipment and machinery may be attached to realty.
Agricultural operating structures include single purpose
					 agricultural or horticultural structures as defined in Treasury Regulation
					 1.48-10 (26 CFR
					 1.48-10). Such structures must be
					 specifically designed and constructed for the permitted purposes of housing,
					 raising and feeding of livestock or the commercial production of plants. A
					 structure is specifically designed and constructed if it is not economic to
					 design and construct the structure for the intended qualifying purpose and then
					 use the structure for a different purpose. A structure qualifies as single
					 purpose agricultural or horticultural structure only if it is used exclusively
					 for a permitted purpose. The structure may not be used for any nonpermissible
					 purposes such as processing, marketing, or more than incidental use for storing
					 feed and equipment. A single purpose agricultural structure also houses
					 equipment necessary to house, raise and feed livestock including, but not
					 limited to, equipment necessary to contain livestock, to provide them with feed
					 or water, and to control the temperature, lighting, and humidity of the
					 interior structure. Examples of structures that qualify as a single purpose
					 agricultural or horticultural structure include, but are not limited to, a
					 farrowing barn, greenhouse, free stall barn, milking parlor, and egg production
					 or poultry brooding facility. Single purpose agricultural or horticultural
					 structures do not include general purpose farm buildings.
Farm equipment and machinery does not include tangible
					 personal property primarily used in the administration, management, or
					 marketing of a qualified person's operations or that of another who assists a
					 qualified person. Farm equipment and machinery also does not include tangible
					 personal property that is, without limitation, a supply item not used in
					 producing or harvesting agricultural products such as shop towels, cleaning
					 agents, hand cleaners, chemicals, and articles of clothing, except clothing
					 designed primarily to protect a commodity or to apply agricultural chemicals as
					 described in
					 3 CCR
					 6738.
(B) Any new or used vehicle, as defined in
				  Chapter 1, Division 16 of the Vehicle Code, which is used exclusively in the
				  conduct of agricultural operations such as a farm tractor, but not including a
				  vehicle whose existing design is primarily for the transportation of persons or
				  property on a highway, unless such vehicle is otherwise specified as an
				  implement of husbandry in some other provision of the Vehicle Code.
A list of typical vehicles regarded as farm equipment and
					 machinery is set forth in Appendix A.