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Ezel / Tax Rulings / TX
TX 9010L1047F09 Sales and/or Use Tax (State,Local,MTA) 1990-10-04

Were sales of pecan trees taxable in Texas?

Short answer: Generally yes, but a buyer in the business of raising and regularly selling pecans could buy the trees exempt by giving the seller an exemption certificate.

Apply this to your situation

This page answers the general question as of 1990. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1990
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

A grower planned to sell pecan trees. The Comptroller said the trees were taxable, so the grower needed a sales-tax permit and had to collect tax on the sales price.

A sale was exempt when the buyer was in the business of raising and selling pecans in the regular course of business. That buyer could issue an exemption certificate instead of paying tax.

What this means for you

The tree itself was normally taxable. The exemption depended on the purchaser's commercial pecan-production use and documentation, not merely on the tree being agricultural in character.

Common questions

Were pecan trees generally taxable? Yes.

Did the seller need a Texas permit? Yes, if it did not already have one.

When was a tree sale exempt? When the buyer raised and regularly sold pecans as a business.

What documentation was required? An exemption certificate.

Citations and references

  • 34 Tex. Admin. Code Rule 3.287 (exemption certificates)

Source

Original ruling text

October 4, 1990

Dear **:

We received your letter questioning the taxability of pecan trees.
According to your letter, you have raised pecan trees that you in-
tend to sell.

The pecan trees are taxable; therefore, you should obtain a sales
tax permit if you don't already have one. You should collect tax
on your sales price for the pecan trees and remit the tax to the
State. I am sending you a tax permit application under separate
cover.

The sale of the pecan trees would be exempt from tax if the pur-
chase is in the business of raising and selling pecans. If the
purchaser sells pecans in their regular course of business, then
they may issue you an exemption certificate in lieu of the tax due
on the pecan trees. Enclosed is a copy of rule 3.287 relating to
exemption certificates.

This opinion is based upon the facts you presented. If there are
additional or different facts, this opinion may change.

If you have any questions you may call or write Tax Correspondence.
You may call toll free 1- 800- 252-5555, or our regular number is
512/463-4600. My extension is 3-4658.

Sincerely,

Sherry Buckley
Tax Correspondence

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