Are pressure washers and their repair parts exempt when used to clean farm or cotton-gin equipment and purchased with a GATE certificate?

Plain-English summary

Pressure washers and other cleaning equipment used to maintain general farm machinery or cotton-gin equipment qualified as exempt agricultural machinery. Repair, replacement, and component parts installed on that qualifying cleaning equipment were exempt too.

The seller needed a valid Georgia Agricultural Tax Exemption certificate accepted in good faith. The certificate had to be complete, appropriate, legally available for the sourced transaction, potentially applicable to the item, and reasonable for the purchaser's business.

Common questions

Q: Did the exemption cover only cleaning poultry houses?

A: No. The ruling extended it to equipment used to clean and maintain general farm equipment and cotton-gin machinery.

Q: Was any agricultural exemption form acceptable?

A: No. The ruling said the GATE certificate was the acceptable certificate for purchases under that program.

Citations and references

• O.C.G.A. § 48-8-3.3(a)(1), (b) -- agricultural machinery and equipment exemption
• O.C.G.A. § 48-8-38 -- good-faith exemption certificates

Source

• Landing page: Georgia Sales & Use Tax Letter Rulings
• Original PDF: LR SUT-2013-08

Original ruling text

State of Georgia
Douglas J. MacGinnitie
Commissioner

Department of Revenue

Administrative Division – Office of Tax Policy
1800 Century Blvd., Suite 15107
Atlanta, Georgia 30345-3205
(404) 417- 6649

Frank M. O’Connell
Director

June 13, 2013

Re: Request for Letter Ruling

This letter is in response to your request for guidance on the application of Georgia sales and use
tax to the taxability of certain sales made to Georgia Agriculture Tax Exemption (“GATE”)
certificate holders.
Facts
Taxpayer provided the following facts:
Taxpayer sells and services cleaning equipment to the agricultural industry, and
is getting inquiries about the use of the GATE card when purchasing and
servicing hot and cold water pressure washers.
The Informational Bulletin SUT 2013-01-28 states that machinery and
equipment used to clean and maintain a poultry house and the surrounding
premises is a purchase that qualifies for the agriculture exemption, as well as
repair and replacement parts for tractors and other farm machinery and
equipment, including tires, batteries, spark plugs, motor oils, oil filters, greases,
lubes and hydraulic fluids. However, it does not state anything about machinery
and equipment used to clean and maintain general farm equipment. Taxpayer has
also had this question arise from the manager of a cotton gin in regards to
cleaning equipment to clean and maintain equipment around the gin.

An Equal Opportunity Employer

June 13, 2013
Page 2 of 4

Issues

1. Is cleaning equipment that is used to clean and maintain general farm equipment on
   a farm a qualifying purchase?
2. If this is a qualifying purchase, are repair and replacement parts for equipment used
   to clean and maintain general farm equipment on a farm a qualifying purchase?
3. Is cleaning equipment that is used to clean and maintain cotton gin equipment
   (example module builders, module trucks, loaders, etc.) a qualifying purchase?
4. If this is a qualifying purchase, are repairs and replacement parts for equipment used
   to clean and maintain cotton gin equipment a qualifying purchase?
   Analysis
   Georgia levies and imposes sales tax (subject to certain specific exemptions) on the retail
   purchase, retail sale, storage, use, or consumption of tangible personal property and on certain
   enumerated services. 1 Every purchaser of tangible personal property at retail in Georgia is liable
   for a tax on the purchase at the rate of 4 percent of the sales price of the purchase, plus any
   applicable local sales taxes. 2 All sales are deemed taxable unless the contrary is established. 3 In
   order to claim exemption, the seller ordinarily obtains an exemption certificate from the
   purchaser showing that the purchaser is exempt from the tax. 4
   The sales and use taxes levied or imposed by this article shall not apply to sales to, or use by, a
   qualified agriculture producer of agricultural production inputs, energy used in agriculture, and
   agricultural machinery and equipment. 5 A dealer can make exempt sales of agricultural
   machinery and equipment to a qualified agricultural producer providing a valid Georgia
   Agriculture Tax Exemption (GATE) certificate issued by the Georgia Department of Agriculture.
   “Agricultural machinery and equipment” means machinery and equipment used in the
   production of agricultural products, including, but not limited to, machinery and equipment used
   in the production of poultry and eggs for sale, including, but not limited to, equipment used in
   the cleaning or maintenance of poultry houses and the surrounding premises... 6 Machinery and
   equipment used to repair or maintain agricultural machinery and equipment is qualifying
   agricultural machinery and equipment and exempt from Georgia sales and use tax.
   1

O.C.G.A. §§ 48-8-1 and 48-8-30(a).
Tangible personal property is defined as personal property “which may be seen, weighted, measured, felt, or
touched, or is in any other manner perceptible to the senses.” State v. Cherokee Brick & Tile Co., 79 S.E.2d 322
(1953).
3
O.C.G.A. § 48-8-38.
4
O.C.G.A. § 48-8-38; Ga. Comp. R. & Regs. r. 560-12-1-.08(1).
5
O.C.G.A. § 48-8-3.3(b).
6
O.C.G.A. § 48-8-3.3(a)(1)(A).
2

June 13, 2013
Page 3 of 4

“Agricultural machinery and equipment” also means … any repair, replacement, or component
parts installed on agricultural machinery and equipment. 7 Repair, replacement, and component
parts installed on machinery and equipment used to repair or maintain agricultural machinery
and equipment are exempt from Georgia sales and use tax.
The previous and the amended versions of O.C.G.A. § 48-8-38 both state that the seller bears the
burden of proving that a retail sale is not subject to sales tax. Prior to March 5, 2013, sellers met
the burden of proving that a sale was not subject to sales tax by accepting a properly completed
certificate of exemption or obtaining the relevant data from the purchaser within 90 days
subsequent to the date of the sale. The amendment changes the manner in which sellers meet this
burden. Effective March 5, 2013, O.C.G.A. § 48-8-38 requires retail sellers to collect sales tax
unless they “in good faith” take from the purchaser a properly completed certificate of
exemption.
A seller takes a properly completed certificate in good faith if the certificate is:
•
•
•
•
•

Fully completed, including, but not limited to, the name, address, sales tax number, and
signature of the taxpayer when required;
In a form appropriate for the type of exemption claimed;
Claiming an exemption that was statutorily available on the date of the transaction in the
jurisdiction where the transaction is sourced;
Claiming an exemption that could be applicable to the item being purchased; and
Claiming an exemption that is reasonable for the purchaser's type of business.

The amendment’s good faith requirement applies to all exempt sales, including sales exempt
under the GATE program. The amendment does not change the exemption certificate acceptable
under the GATE program: The GATE certificate remains the only form of agriculture exemption
certificate acceptable for purchases under this program.
Rulings
Effective March 5, 2013, O.C.G.A. § 48-8-38 requires retail sellers to collect sales tax unless
they “in good faith” take from the purchaser a properly completed certificate of exemption.
A seller takes a properly completed certificate in good faith if the certificate is:
•
•
•

7

Fully completed, including, but not limited to, the name, address, sales tax number, and
signature of the taxpayer when required;
In a form appropriate for the type of exemption claimed;
Claiming an exemption that was statutorily available on the date of the transaction in the
jurisdiction where the transaction is sourced;

O.C.G.A. § 48-8-3.3(a)(1)(B).

June 13, 2013
Page 4 of 4
•
•

Claiming an exemption that could be applicable to the item being purchased; and
Claiming an exemption that is reasonable for the purchaser's type of business.

1. Sales of cleaning equipment used to clean and maintain general farm equipment are exempt
   from Georgia sales and use tax when the seller accepts a valid GATE certificate in good
   faith.
2. Sales of repair and replacement parts for equipment used to clean and maintain general farm
   equipment are exempt from Georgia sales and use tax when the seller accepts a valid GATE
   certificate in good faith.
3. Sales of cleaning equipment used to clean and maintain cotton gin equipment are exempt
   from Georgia sales and use tax when the seller accepts a valid GATE certificate in good
   faith.
4. Sales of repair and replacement parts for equipment used to clean and maintain cotton gin
   equipment are exempt from Georgia sales and use tax when the seller accepts a valid GATE
   certificate in good faith.

The opinions expressed in this ruling are based upon the information contained in your request
and limited to the specific transactions, facts, and taxpayer in question. Should the circumstances
regarding the transactions change, or differ materially from those represented, then this ruling
may become invalid. In addition, please be 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 tax treatment than that expressed in this
response.