Farm Vehicles and Machinery Sales Tax Exemptions

September 2001

The sales tax law provides an exemption for repair or replacement parts for farm vehicles and machinery used exclusively in the production of food, grass, or agricultural products held for sale in the regular course of business.

Sales tax is due on sales of repair and replacement parts for vehicles licensed or inspected for highway use. The agricultural exemption does not apply to these vehicles.

Please note, a signed Texas Sales and Use Tax Exemption Certificate does not automatically exempt the purchaser from sales tax on EVERY purchase. For example, a rancher may not claim a tax exemption on the purchase of tires for his pickup that he uses for everyday transportation.

Be sure you have filed a Texas Sales and Use Tax Exemption Certificate with your retailer.

Always sign each tax-exempt invoice for your retailer.

For more information, visit my Window on State Government Web site at http://www.window.state.tx.us/taxinfo/sales/index.html.

Copies of Rule 3.296, the Texas Sales and Use Tax Exemption Certificate, and the tax publication Agricultural Sales Tax Exemptions, are available on the Web site.

You may also request these items by e-mail at tax.help@cpa.state.tx.us, or by calling my office toll-free at 1-800-252-5555.

98-584
09/01