The sales and use tax does not apply to sales, including rentals, to a farmer of farm equipment used to raise livestock and poultry, prepare, irrigate or tend the soil, or plant, service, harvest, store, clean, dry or transport seeds or crops. Farm equipment that is used for traditional agricultural purposes is exempt from sales and use tax even if attached to real property. The tax does not apply to the sale of an agricultural product by a farmer. However, sales of flowers, sod, decorative trees, shrubs and any other product usually sold by a nursery or horticulturist do not qualify for exemption.
Commercial aquaculture is given the same treatment as is commercial agriculture.
If a farmer is engaged in processing food for sale, there are exemptions available for purchases of capitalized equipment and consumables. These exemptions are explained in Business Tax Tip #9.