Indiana Administrative Code › Title 45 - DEPARTMENT OF STATE REVENUE › Article 2.2 - SALES AND USE TAX › Rule 5 - Exempt Transactions of a Retail Merchant › Section 5-4 - Farmers and others engaged in agricultural production

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 4.
(a)
				Agricultural exemption certificates may be used only if the purchaser is
				occupationally engaged in the business of producing food or commodities for
				human, animal, or poultry consumption for sale or for further use in such
				production.
(b) The department has
				determined that persons occupationally engaged in producing food and
				commodities as used in the Indiana sales and use tax act, shall mean and
				include only those persons, partnerships, or corporations whose intention it is
				to operate a farm at a profit and not those persons who intend to operate a
				farm for pleasure as a hobby. Operations similar to those of a pony farm,
				riding stable, or the production and raising of dogs and pets, are not
				classified as farms for the purpose of the state gross retail tax
				act.
(c) The following is a partial
				list of items which are considered subject to the sales tax.
TAXABLE TRANSACTIONS
Fences, posts, gates, and fencing materials.
Water supply systems for personal use.
Drains.
Any motor vehicle which is required by the motor vehicle law
				  to be licensed for highway use.
Ditchers and graders.
Paints and brushes.
Refrigerators, freezers, and other household
				  appliances.
Garden and lawn equipment, parts, and supplies.
Electricity for lighting and other non-agricultural
				  use.
Any materials used in the construction or repair of
				  non-exempt: buildings, silos, grain bins, corn cribs, barns, houses, and any
				  other permanent structures.
Items of personal apparel, including footwear, gloves, etc.,
				  furnished primarily for the convenience of the workers if the workers are able
				  to participate in the production process without it.
Pumps.
All saws.
All tools, including forks, shovels, hoes, welders, power
				  tools, and hand tools.
Building materials or building hardware such as lumber,
				  cement, nails, plywood, brick, paint.
Plumbing, electrical supplies, and accessories, pumps.
Horses, ponies, or donkeys not used as draft animals in the
				  production of agricultural products.
Food for non-exempt horses, ponies, etc.
Fertilizer, pesticides, herbicides, or seeds to be used for
				  gardens and lawns.
Field tile or culverts.
Graders, ditchers, front end loaders, or similar equipment
				  (except equipment designed to haul animal waste).
Any replacement parts or accessories for the above
				  items.
(d) Each of the
				following items is considered exempt from the sales tax ONLY when the purchaser
				is occupationally engaged in agricultural production and uses the items
				directly in direct production of agricultural products.
EXEMPT TRANSACTIONS
(1) Livestock and poultry sold for raising
				food for human consumption and breeding stock for such purposes.
(2) Feed and medicines sold for livestock and
				poultry described in Item (1).
(3)
				Seeds, plants, fertilizers, fungicides, insecticides, and herbicides.
(4) Implements used in the tilling of land
				and harvesting of crops therefrom, including tractors and
				attachments.
(5) Milking machines,
				filters, strainers, and aerators.
(6) Gasoline and other fuel and oil for farm
				tractors and for other exempt farm machinery.
(7) Grease and repair parts necessary for the
				servicing of exempt equipment.
(8)
				Containers used to package farm products for sale.
(9) Equipment designed to haul animal
				waste.
(10) Equipment such as
				needles, syringes, and vaccine pumps.