Was ripening concentrate used in ethylene generators at produce warehouses exempt from Florida sales and use tax?

Plain-English summary

Florida ruled that the taxpayer's produce-ripening agent qualified for the agricultural pesticide exemption if the specific product was registered as a plant regulator by the Florida Department of Agriculture and Consumer Services. Florida's pesticide definition expressly included substances intended for use as plant regulators.

The taxpayer supplied a concentrate containing 92.46% ethanol and loaned ethylene generators to produce warehouses at no charge. In a controlled ripening room, the generator converted the concentrate into ethylene gas, which triggered bananas' natural ripening process. The same process was used for tomatoes, kiwi, avocados, and other produce.

Plant-regulator status brought the product within “pesticide”

Section 487.021(51) defined a plant regulator as a substance intended, through physiological action, to accelerate or retard growth or maturation or otherwise alter crop plants or their produce.

Section 487.021(49) included substances intended for use as plant regulators within “pesticide.” Section 212.08(5)(a), in turn, exempted pesticides and specified other agricultural chemicals used on crops or groves.

The exemption depended on product registration

The Department relied on information from the Florida Department of Agriculture and Consumer Services that registered ethylene plant-regulator products were labeled for postharvest use on citrus, tomatoes, and other agricultural crops.

Florida therefore stated the result conditionally: if the taxpayer's product was registered as a plant regulator, it qualified for the pesticide exemption. The product's ripening function by itself did not replace that registration requirement.

This ruling revised an older response

The Department originally issued TAA 98A-099 on December 28, 1998. After further consideration, it issued revised TAA 98A-099R on July 30, 2004.

What this means for you

Ripening-agent and agricultural-chemical suppliers

Keep records showing that the exact product sold is registered as a plant regulator. The advisement ties the exemption to that status.

Produce warehouses and distributors

The ruling addressed a concentrate used through a loaned generator to trigger postharvest ripening. Confirm that your product and use match the registration and label rather than assuming all ethylene systems receive the same treatment.

Accountants and tax professionals

Trace the exemption through both statutes: the agricultural exemption covered pesticides, and the pesticide definition included registered plant regulators. Distinguish the purchased concentrate from the generator, which the taxpayer loaned at no charge.

Common questions

Q: Was the loaned ethylene generator the exempt product?
A: The requested advice concerned the ripening agent. The generators were loaned to warehouses without charge.

Q: Did the concentrate itself contain ethylene?
A: The facts said it contained 92.46% ethanol and produced ethylene gas when placed in the generator.

Q: Was registration optional?
A: No. Florida conditioned the exemption on registration of the taxpayer's product as a plant regulator.

Q: Which produce was described?
A: The ruling used bananas as its detailed example and also named tomatoes, kiwi, avocados, and other fruits and vegetables.

Citations and references

• Fla. Stat. § 212.08(5)(a) — exemption for pesticides and specified agricultural chemicals used on crops or groves
• Fla. Stat. § 487.021(49) — pesticide definition includes substances intended for use as plant regulators
• Fla. Stat. § 487.021(51) — plant-regulator definition

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 98A-099R

Original ruling text

SUMMARY
QUESTION: Are ethylene gas ripening agents tax exempt?
ANSWER - Based on Facts Below: According to the Florida Department of Agriculture and Consumer Services,
ethylene products registered by it as plant regulators under Chapter 487, Florida Statutes, are labeled with directions
for post harvest use on citrus and tomatoes, as well as a variety of other agricultural crops produced by farmers. Plant
regulators are a subcategory of pesticides, which enjoy an exemption from Florida sales and use tax.

July 30, 2004
Re: Technical Assistance Advisement 98A-099R
Sales and Use Tax - Gas Used in Fruit Processing
Sections: 212.08, 487.021, F.S.
Petitioner: XXX (herein "Taxpayer")
FEI: XX
Dear:
In response to your petition dated June 8, 1998, the Department issued Technical Assistance Advisement 98A-099,
dated December 28, 1998, pursuant to section 213.22, Florida Statutes, and Chapter 12-11, Florida Administrative
Code. After further consideration, the Department has revised its response to the questions contained in your petition.
This response constitutes Revised Technical Assistance Advisement 98A-099R.

FACTS

Your June 8, 1998, petition set forth the following facts:

[Taxpayer] is in the business of supplying Ripener I Concentrate (herein "ripening agent") and loaning ARCO Ethylene
Generators (herein "generators") to produce warehouses. These products are used to ripen their produce so that it is
ready to sell to the consumer.

For example, in the case of produce warehouses who carry bananas: when the warehouse purchases bananas from
its supplier, the fruit is in an unripened state and is stone green in color. These bananas are not salable at the time
they are received. These bananas are then placed in atmospherically controlled rooms, called ripening rooms. [A
generator] (which is loaned to the warehouse at no charge) is placed in this room and filled with [ripening agent.
Ripening agent] contains 92.46% ethanol. When put through [a generator], ethylene gas is produced. This gas
triggers the banana's natural ripening process. Once the ripening process is triggered, the bananas produce their own
ethylene gas. The rooms are then vented and cooled. At this point the bananas are ready for sale to the consumer, as
the ripening has been triggered.

This process is used for various other fruits and vegetables such as tomatoes, kiwi, avocados, etc.

REQUESTED ADVISEMENT

Advice is requested whether the ripening agent is exempt from tax.

DETERMINATION

Section 212.08(5)(a), Florida Statutes, provides an exemption for "disinfectants, fertilizers, insecticides, pesticides,
herbicides, fungicides, and weed killers used for application on crops or groves, including commercial nurseries...."

Section 487.021(49), Florida Statutes, defines the term "pesticide" in pertinent part as follows:

"Pesticide" means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating
any insects, rodents, nematodes, fungi, weeds, or other forms of plant or animal life or viruses, except viruses,
bacteria, or fungi on or in living humans or other animals, which the department by rule declares to be a pest, and any
substance or mixture of substances intended for use as a plant regulator, defoliant, or desiccant.... (Emphasis

Supplied)

Section 487.021(51), Florida Statutes, defines the term "plant regulator" as follows:

"Plant regulator" means any substance or mixture of substances intended, through physiological action, for
accelerating or retarding the rate of growth or maturation, or for otherwise altering the behavior, of ornamental or crop
plants or the produce thereof; but does not include substances intended as plant nutrients, trace elements, nutritional
chemicals, plant inoculants, or soil amendments.

According to the Florida Department of Agriculture and Consumer Services, ethylene products registered by it as plant
regulators under Chapter 487, Florida Statutes, are labeled with directions for post harvest use on citrus and
tomatoes, as well as a variety of other agricultural crops produced by farmers. Plant regulators are a subcategory of
pesticides, which enjoy an exemption from Florida sales and use tax. Therefore, if Taxpayer's product is registered
with the Florida Department of Agriculture and Consumer Services as a plant regulator, then it qualifies for the
exemption on pesticides.

This response constitutes a Technical Assistance Advisement under Section 213.22, F.S., which is binding on the
department only under the facts and circumstances described in the request for this advice, as specified in Section
213.22, F.S. Our response is predicated upon those facts and the specific situation summarized above. You are
advised that subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules
upon which this advice is based may subject similar future transactions to a different treatment from that which is
expressed in this response.

You are further advised that this response, your request and related backup documents are public records under
Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential
information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this
response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.

Sincerely,

Sara D. Faulkenberry

Tax Law Specialist

Technical Assistance and Dispute Resolution

Control #60872

In response to your petition dated June 8, 1998, the Department issued Technical Assistance Advisement 98A-099,
dated December 28, 1998, pursuant to section 213.22, Florida Statutes, and Chapter 12-11, Florida Administrative
Code. After further consideration, the Department has revised its response to the questions contained in your petition.
This response constitutes Revised Technical Assistance Advisement 98A-099R.

FACTS

Your June 8, 1998, petition set forth the following facts:

[Taxpayer] is in the business of supplying Ripener I Concentrate (herein "ripening agent") and loaning ARCO Ethylene
Generators (herein "generators") to produce warehouses. These products are used to ripen their produce so that it is
ready to sell to the consumer.

For example, in the case of produce warehouses who carry bananas: when the warehouse purchases bananas from

its supplier, the fruit is in an unripened state and is stone green in color. These bananas are not salable at the time
they are received. These bananas are then placed in atmospherically controlled rooms, called ripening rooms. [A
generator] (which is loaned to the warehouse at no charge) is placed in this room and filled with [ripening agent.
Ripening agent] contains 92.46% ethanol. When put through [a generator], ethylene gas is produced. This gas
triggers the banana's natural ripening process. Once the ripening process is triggered, the bananas produce their own
ethylene gas. The rooms are then vented and cooled. At this point the bananas are ready for sale to the consumer, as
the ripening has been triggered.

This process is used for various other fruits and vegetables such as tomatoes, kiwi, avocados, etc.

REQUESTED ADVISEMENT

Advice is requested whether the ripening agent is exempt from tax.

DETERMINATION

Section 212.08(5)(a), Florida Statutes, provides an exemption for "disinfectants, fertilizers, insecticides, pesticides,
herbicides, fungicides, and weed killers used for application on crops or groves, including commercial nurseries...."

Section 487.021(49), Florida Statutes, defines the term "pesticide" in pertinent part as follows:

"Pesticide" means any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating
any insects, rodents, nematodes, fungi, weeds, or other forms of plant or animal life or viruses, except viruses,
bacteria, or fungi on or in living humans or other animals, which the department by rule declares to be a pest, and any
substance or mixture of substances intended for use as a plant regulator, defoliant, or desiccant.... (Emphasis
Supplied)

Section 487.021(51), Florida Statutes, defines the term "plant regulator" as follows:

"Plant regulator" means any substance or mixture of substances intended, through physiological action, for
accelerating or retarding the rate of growth or maturation, or for otherwise altering the behavior, of ornamental or crop
plants or the produce thereof; but does not include substances intended as plant nutrients, trace elements, nutritional
chemicals, plant inoculants, or soil amendments.

According to the Florida Department of Agriculture and Consumer Services, ethylene products registered by it as plant
regulators under Chapter 487, Florida Statutes, are labeled with directions for post harvest use on citrus and
tomatoes, as well as a variety of other agricultural crops produced by farmers. Plant regulators are a subcategory of
pesticides, which enjoy an exemption from Florida sales and use tax. Therefore, if Taxpayer's product is registered
with the Florida Department of Agriculture and Consumer Services as a plant regulator, then it qualifies for the
exemption on pesticides.

This response constitutes a Technical Assistance Advisement under Section 213.22, F.S., which is binding on the
department only under the facts and circumstances described in the request for this advice, as specified in Section
213.22, F.S. Our response is predicated upon those facts and the specific situation summarized above. You are
advised that subsequent statutory or administrative rule changes or judicial interpretations of the statutes or rules
upon which this advice is based may subject similar future transactions to a different treatment from that which is
expressed in this response.

You are further advised that this response, your request and related backup documents are public records under
Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential
information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the
undersigned with an edited copy of your request for Technical Assistance Advisement, the backup material and this
response, deleting names, addresses and any other details which might lead to identification of the taxpayer. Your
response should be received by the Department within 15 days of the date of this letter.

Sincerely,

Sara D. Faulkenberry

Tax Law Specialist

Technical Assistance and Dispute Resolution

Control #60872