AR: Poultry Farmer Denied Exemption

Arkansas Sales & Use Tax: A poultry farmer (taxpayer) was rightly denied a commercial farming exemption when purchasing a poultry house blower. The taxpayer could not prove that the chicken coup fan was used directly to produce food or fiber. At the time of purchase, an exemption certificate was signed in the taxpayer’s name, certifying that he operates the commercial poultry farm and that the equipment is used exclusively and directly for the commercial production of feed or fiber.

However, the Department of Finance and Administration found that although the exemption certificate stated that the equipment was used on an exempt basis, it did not verify how the taxpayer used it. Furthermore, the exemption certificate signed in the taxpayer’s name requires the transfer of the tax burden to the taxpayer, and therefore, the refusal is maintained.


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