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 5-3 - Sales to farmers; agricultural commodities

Current through July 10, 2024
Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 3.
(a)
				Definitions: Fertilizer. The term "fertilizer" means a commodity which contains
				one or more substances to increase the available plant food content of the soil
				and which becomes a part of the products grown therein.
Farmer. For definition of "farmer" as used in this regulation
[45 IAC 2.2]
refer to Regs. 6-2.5-5-1(010)
[ 45 IAC
				  2.2-5-1 ]
.
Farming. The term "farming" means engaged in the commercial
				  production of food or agricultural commodities as a "farmer".
(b) In general, purchases of tangible
				personal property by farmers are taxable. The exemptions provided by this
				regulation
[45 IAC 2.2]
apply only to seeds, fertilizers,
				fungicides, insecticides, and other tangible personal property to be directly
				used by the farmer in the direct production of food and agricultural
				commodities. This exemption is limited to "farmers".
(c) The state gross retail tax shall not
				apply to:
(1) Sales to farmers and to other
				persons occupationally engaged in the business of producing food and
				agricultural commodities for human, animal, and poultry consumption (either for
				sale or further use in producing such food and agricultural commodities for
				sale) of seeds, plants, fertilizers, fungicides, insecticides, and other
				tangible personal property to be directly used by the purchaser in the direct
				production of food and agricultural commodities.
(2) Sales to farmers of seeds, plants,
				fertilizers, fungicides, insecticides, and other tangible personal property to
				be directly used by the farmer in the direct production of food or agricultural
				commodities for human, animal, or poultry consumption either for sale or for
				further use in producing food and agricultural commodities for sale are exempt
				from tax. "To be directly used in the direct production of food or agricultural
				commodities for human, animal, or poultry consumption either for sale or for
				further use in producing food and agricultural commodities for sale," the
				property in question must have an immediate effect on the article being
				produced. Property has an immediate effect on the article being produced if it
				is an essential and integral part of an integrated process which produces food
				or an agricultural commodity.
(3)
				Seeds and plants. Sales to farmers of seeds and plants for sale or for further
				use in producing food and agricultural commodities for sale are exempt from tax
				provided such seeds and plants are used directly in farming.
(4) Fertilizer. Sales to farmers of
				fertilizer are exempt from tax provided that such fertilizer is used directly
				in farming.
(5) Fungicides and
				insecticides. Sales to farmers of fungicides and insecticides are exempt from
				tax provided such items are used directly in farming.
(6) Sales to farmers of tangible personal
				property used to groom or treat poultry and animals used in the production of
				food, so as to preserve their health, (including property such as medicines,
				serums, dehorners, debeakers, hoof trimmers
[sic.,]
hormones
				for productive animals, inoculation needles, and syringes) are exempt from
				tax.