New Sales Tax Exemption Registration for Agriculture and Timber Operators

September 30, 2011

(AUSTIN)- Beginning Jan. 1, 2012, farm, ranch, and timber operators who produced agricultural and timber products for sale will need a special registration number to claim a sales tax exemption on taxable products used in those businesses. Texas Comptroller Susan Combs announced they can get a registration number through either a mail-in application or an online application taht begins Oct. 3.

Registration is required by House Bill 268 passed in the recent legislative session and supported by retailers and agriculture groups.

“Beginning Jan. 1, anyone who wants to claim the agriculture or timber sales tax exemptions for qualifying products will need a registration number to show retailers, instead of simply signing an exemption certificate at the time of purchase,” Combs said. “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.”

The new legislation requires a registration number to claim tax exemptions when buying items such as machinery and equipment; fertilizers; insecticides; irrigation equipment; and off-road motor vehicles used for farming and timber production.  Those entitled to make tax-free purchases of taxable qualifying products include groups such as:

 farmers and ranchers who raise agricultural products to sell to others;

 fish farmers and bee keepers who sell the products they raise;

 custom harvesters;

 crop dusters;

 commercial nurseries engaged in fostering growth of plants for sale; and

 timber producers, including contract lumberjacks.

Products such as feed for livestock and wildlife, seeds and annual plants are always tax-exempt and would not require a registration number.

The primary owner or operator of a farm, ranch or timber operation may obtain one registration number that can be used by anyone authorized by the registrant – including family members or employees – to make tax exempt purchases of qualifying products for the business.

The application for a registration number should take less than 10 minutes to complete. Online registration begins Oct. 3 at Online applicants will receive a registration number immediately. If you prefer, you may download a paper application form from the website or call 1-800-252-5555 to receive a form by mail.

Congress Listens To Livestock Producers' Concerns About Feed Availability.

The House Committee on Agriculture's Subcommittee on Livestock, Dairy and Poultry this week heard the challenges the livestock and poultry industries face today and expect to face in the coming years because of tight feed grain supplies. The hearing came on the heels of a USDA World Agriculture Supply and Demand Estimates report that projected this year's corn crop will be 417 million bu. lower than initial estimates. Tight corn supplies, which have been affected by bad weather and rising demand, particularly from the ethanol industry, have pushed prices to nearly $7.50 a bu. and prompted concerns about possible feed grain shortages.
Representatives from the National Cattlemen's Beef Association (NCBA), National Pork Producers Council, National Turkey Federation, National Chicken Council and the American Feed Industry Association testified before the subcommittee.
"While U.S. corn usage for food and industrial purposes other than ethanol have remained relatively constant since 2008, the amount of corn used for ethanol has increased eight-fold, with three-quarters of that increase occurring since 2005," said Steve Meyer on behalf of NCBA. Meyer is president of Paragon Economics, a livestock and grain marketing and economic advisory company in Adel, Iowa.
"I realize we cannot 'un-ring the bell' on ethanol subsidies and tariffs, but subsidized ethanol has meant record-high corn prices and record-high costs of production for meat and poultry resulting in lower per capita meat and poultry output," Meyer continued. "If you hear from anyone that the government should not be deciding on winners and losers, please realize that you have already done so."

NCBA's press release, including statements from the other witnesses, is available at

To watch the hearing and/or read the witnesses written testimonies, visit

For more about the new tax certification, visit