201112.21
0

New Sales Tax Exemption Registration

Texas – Starting January 1 a special registration number will be needed to claim sales tax exemption on purchased taxable products used for production of agricultural and timber products for sale by farmers, ranchers and timber operators. This number is made a requirement by HB 268 which passed earlier this year.

Susan Combs, State Comptroller, issues a statement and said “Beginning January 1, anyone who wants to claim the agriculture or timber sales tax exemption for qualifying products will need a registration number to show retailers instead of simply signing an exemption certificate at the time of purchase. The New registration process takes the burden off retailers to verify whether a purchaser is eligible for exemption and it narrows the pool of purchasers claiming the sales tax exemption to those actually involved in production of agriculture and timber products for sale.”

This will affect many purchasers of particular items used in production of commodities by agriculture producers. Those entitled to make tax-free purchases of taxable qualifying products include:

• Farmers and ranchers who raise agricultural products to sell to others.
• Fish farmers and beekeepers who sell the products they raise.
• Custom harvesters.
• Crop dusters.
• Commercial nurseries engaged in fostering growth of plant for sale.
• Timber producers, including contract lumberjacks.