Sales Tax Exemption Requirement for Commercial Agriculture and Timber Operations – Getting an Ag/Timber Number
Do I need an Ag/Timber Number?
Yes, if you are a commercial farmer, rancher or timber producer and want to claim an exemption from sales tax on the purchase of certain items used in the production of agricultural and timber products, you will need to obtain a Texas Agricultural and Timber Exemption Number (Ag/Timber Number).
Texas law requires a person claiming an exemption from sales tax on such purchases to provide an Ag/Timber Number issued by the Comptroller of Public Accounts on the exemption certificate given to the seller. The Comptroller will provide an Ag/Timber Number to you upon your successful application for an Ag/Timber Number.
Who does not need an Ag/Timber Number?
Texas state and local government entities (including public schools and universities), as well as 501(c)(3) and similar organizations that qualify for exemption (PDF, 449KB) under Tax Code Sections 151.309 and 151.310, are not required to have an Ag/Timber Number.
Retailers buying products to resell should continue to provide a properly completed resale certificate to suppliers and do not need to provide an Ag/Timber Number.
What types of items are subject to this requirement?
You must have an Ag/Timber Number to claim an exemption from Texas sales and use tax when purchasing:
- fertilizers, fungicides, insecticides, herbicides, defoliants and desiccants used exclusively in the production of timber for sale, or on a commercial farm or ranch in the production of food or other agricultural products for sale;
- machinery and equipment (including component parts) used exclusively in the production of timber, or on a commercial farm or ranch in the production of food or other agricultural products for sale or the building or maintaining of roads and water supplies;
- machinery and equipment used by an original producer for packing and processing agricultural or timber products;
- machinery and equipment used exclusively in an agricultural aircraft operation, as defined by 14 C.F.R. Section 137.3 (crop dusting);
- tangible personal property incorporated into a structure used for poultry carcass disposal;
- components of irrigation systems used in the production of food and other agricultural and timber products for sale;
- seedlings used in the production of timber for sale;
- electricity used in agriculture or timber operations;
- services performed on exempt tangible personal property identified in this list; and
- farm, timber and off-road motor vehicles.
What types of items are not subject to this requirement?
You do not need an Ag/Timber Number to purchase these items tax-free:
- horses, mules and work animals commonly used in agricultural production;
- animal life, the products of which ordinarily constitute food for human consumption, such as cattle, hogs, goats, sheep, chickens and turkeys;
- feed, including oats, corn, chicken scratch and hay, for farm and ranch animals and wildlife;
- feed for animals held for sale in the regular course of business;
- seeds and annual plants, the products of which are commonly recognized as food for humans or animals, or are usually only raised to be sold in the regular course of business such as corn, oats soybeans and cotton seed; and
- ice used exclusively by commercial fishing boats in storing aquatic species including, but not limited to, shrimp and other crustaceans, finfish, mollusks and similar creatures.
Who is eligible for an Ag/Timber Number?
You are eligible for an Ag/Timber Number if you are engaged in the production of agricultural or timber products for sale in the regular course of business. You do not have to be a Texas resident.
Eligible persons include:
- farmers and ranchers who raise agricultural products for sale;
- persons engaged in aquaculture and apiculture (i.e., commercial fish farms or bee keepers);
- custom harvesters;
- persons engaged in agricultural aircraft operations, as defined by 14 C.F.R. Section 137.3 (crop dusting);
- commercial nurseries engaged in fostering growth of plants for sale (i.e., growing stock from seed or cuttings, replanting seedlings in larger containers); and
- timber producers, including contract lumberjacks.
Who is not eligible for an Ag/Timber Number?
A person who is not engaged in the production of agricultural or timber products for sale is not eligible for an Ag/Timber Number or the agricultural exemption.
Activities that do not qualify include:
- home gardening;
- horse racing;
- florists and similar retailers who only store or maintain plants prior to sale;
- wildlife management and/or land conservation;
- maintenance and/or operation of hunting and fishing leases;
- horse boarding;
- trail rides;
- commercial fishing; or
- dog breeding and pet kennels.
How do I apply for an Ag/Timber Number?
When you apply online, you will receive your Ag/Timber Number after completing the application. You can print your confirmation letter and a copy of your application. We will also mail a copy of your confirmation letter to you for your records.
Along with the online application, there is an online search tool available. With this search tool, you will be able to check the status of your Ag/Timber Number. Please allow one day for processing and for our system to update before you search for your number.
Paper versions of the Application for Texas Agricultural and Timber Exemption Registration Number (Ag/Timber Number) (PDF, 141KB) are available:
- on our website;
- by calling our Fax on Demand service at 1-800-531-1441; or
- by calling 1-800-252-5555.
Does every person employed by a farm, ranch or timber operation need their own Ag/Timber Number?
The primary owner or operator of the farm, ranch or timber operation can obtain an Ag/Timber Number that any person authorized by the registrant can use to buy qualifying items for the operation.
For example, if three family members operate a family farm or ranch, one member of the family can apply for an Ag/Timber Number for the farm that all three can then use when making qualifying purchases. Similarly, a large corporate agricultural or timber operation with many employees can obtain one Ag/Timber Number that all authorized employees can use when making qualifying purchases.
But, the person who holds the Ag/Timber Number is responsible for ensuring that all items purchased tax-free under that number will be used in a qualifying, exempt manner.
For more information, see:
- Tax Code Sections 151.1551, 151.316, 151.3162, 152.001(a)(13) and 152.091
- Rule 3.296 – Agriculture, Animal Life, Feed, Seed, Plants, and Fertilizer
- Rule 3.367 – Timber Items
- Rule 3.72 – Farm Machines, Timber Machines and Trailers
Links to the Texas Tax Code and Comptroller rules are on our website.