Could a seller exempt Fastrack sold as feed for farm and ranch animals when the product also had nonexempt uses?

Plain-English summary

Feed for farm and ranch animals was exempt, but Fastrack was also used for other animals. The seller therefore needed a purchaser exemption certificate stating that the Fastrack purchases were for use as farm or ranch animal feed.

One blanket certificate per customer was enough for later qualifying Fastrack sales; a new certificate was not required for every transaction.

STAR warns that H.B. 268 later required a Comptroller registration number for certain agricultural and timber exemptions effective January 1, 2012.

Common questions

Was Fastrack automatically exempt? No, because it had nonexempt uses.

What documentation was required? A purchaser certificate stating the farm or ranch animal-feed use.

Was a certificate needed for every sale? No, one blanket certificate could cover later qualifying sales.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8910L0964G09

Original ruling text

ALERT: This document may be affected by changes to the Tax Code which was amended by H.B. 268, 82nd Reg. Legislative Session, 2011. The amendment required persons claiming a sales tax exemption for certain agricultural and timber products to apply for and provide a registration number issued by the Comptroller, effective 01/01/2012.

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller October 23, 1989

Dear ***:

I just want to take a minute to follow-up our phone conversation
with a written response.

Feed for farm and ranch animals is exempt from sales tax. But,
since "Fastrack" isn't just for farm and ranch animals you need
to get the purchaser to give you an exemption certificate in-lieu-
or tax.

The good new is that you don't need an exemption certificate for
every sale. All you need is one blanket certificate per customer.
Just have them fill out the attached form and insert a statement
in the space provided -- Purchaser claims this exemption for the
following reason:

"Purchases of Fastrack are for use as feed for farm and ranch
animals."

If you have a certificate on file with words to this effect, you
don't need to get another certificate to exempt sales of fastrack.

Feel free to call or write me if you have questions. You can reach
me by calling toll free 800-531-5441 or FAX (512) 475-0900.

Sincerely,
Al Van Allen
Taxability Section
Legal Services Division