Is sales tax due on cleaning products and supplies used to raise emus on a farm?

Plain-English summary

A taxpayer raising emus asked the Comptroller whether six products used to protect the birds from disease during their first four months of life qualify for Texas's agricultural sales and use tax exemption. The Comptroller sorted the products into two groups.

Exempt (if used exclusively on the farm/ranch and exclusively for the listed use):

• Automatic dishwashing crystals — used to sterilize drinking containers
• Waush laundry detergent — used to wash bedding in brooder pens
• Rust Off rust remover and cleaner — used to clean hatchers and incubators
• Mox multi-purpose cleaner and degreaser — used to clean hatchers and incubators

Taxable (do not qualify):

• Fortress barrier cream — used to protect workers' hands under rubber gloves
• Spray bottles and pump dispensers — used to apply the above chemicals

The ruling ties the exempt items to Comptroller Rule 3.296 (Agriculture), and notes that any use of the exempt items beyond the specific farm use described would cause the exemption to be lost. It also points the taxpayer to Section (d) of Rule 3.296 for the procedure on accepting exemption certificates.

What this means for you

Emu, poultry, and other livestock producers

If you buy cleaning or sanitizing products that are used exclusively on your farm or ranch to maintain equipment or containers that directly touch your animals (drinking containers, bedding, hatchers, incubators), those products can qualify for the agricultural exemption. Personal-protective items like hand cream, and general-purpose application tools like spray bottles, are treated as taxable overhead rather than exempt farm-use items — even if you only use them in connection with raising livestock.

Accountants and tax professionals

This ruling illustrates the Comptroller's narrow, use-based reading of the Rule 3.296 agricultural exemption: an item's exemption depends on both (1) exclusive use on a farm or ranch and (2) exclusive use for the specific qualifying purpose identified. Mixed or incidental use (e.g., protective gear for a worker, or a generic applicator tool) falls outside the exemption even in an otherwise agricultural operation. Note also the modern-day ALERT on the letter: H.B. 268 (82nd Reg. Session, 2011) later required an agricultural/timber exemption registration number effective January 1, 2012, so this 1993 letter's exemption mechanics may no longer reflect current registration requirements.

Common questions

Q: Are all cleaning supplies used on a farm exempt from Texas sales tax?
A: No. In this ruling, only products used exclusively on the farm for a specific qualifying purpose (sterilizing drinking containers, washing bedding, cleaning hatchers/incubators) were found exempt. Products like protective hand cream and application tools like spray bottles were not exempt.

Q: Why were the spray bottles and pump dispensers taxable if they're only used to apply exempt chemicals?
A: The ruling doesn't explain the reasoning beyond stating the conclusion, but it treats the dispensing equipment itself as separate from the qualifying farm-use products it applies — equipment and containers of that kind fall outside the specific exemption described.

Q: What if I use the exempt products for something other than the specific use described?
A: The ruling says any other use results in a loss of the exemption, so an item like the dishwashing crystals or Rust Off cleaner must be used exclusively on the farm or ranch and exclusively for the specific use identified to stay exempt.

Q: How do I claim this exemption at the point of sale?
A: The letter refers the taxpayer to Section (d) of Rule 3.296 for the procedure on accepting exemption certificates.

Q: Does this letter still reflect current Comptroller policy?
A: The letter itself carries an ALERT noting that H.B. 268 (82nd Reg. Legislative Session, 2011) later required persons claiming this type of agricultural exemption to obtain a registration number from the Comptroller, effective January 1, 2012 — a requirement that postdates this 1993 ruling.

Citations and references

Rules:

• 34 Tex. Admin. Code § 3.296 (Agriculture) — general farm/ranch exemption for the qualifying products
• 34 Tex. Admin. Code § 3.296(d) (Agriculture) — procedure for accepting exemption certificates

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9301L1217F03

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.

January 26, 1993

Dear **:

Thank you for your letter of December 16, 1992, concerning the taxability
of products used to raise emus.

As I understand it, you question the taxability of the following products
which protect emus against disease and infection during the first four
months of the birds life. The products in question include: (1) automatic
dishwashing crystals - used to sterilize drinking containers. (2) Waush
laundry detergent - used to wash the bedding in brooder pens. (3)
Fortress barrier cream - used to protect workers hands when wearing rubber
gloves. (4) Rust Off rust remover and cleaner - used to clean hatchers and
incubators. (5) Mox multi purpose cleaner and degreaser - used to clean
hatchers and incubators. (6) Spray bottles and pump dispensers - used to
apply the above chemicals.

Items (1), (2), (4), and (5) will qualify for exemption from sales and
use tax if used exclusively on a farm or ranch (as defined in the enclosed
Rule 3.296, Agriculture) and used exclusively on the specific items
mentioned. Any other use will result in a loss of the exemption.

Items (3) and (6) do not qualify for exemption.

Please refer to Section (d) of Rule 3.296 for the proper procedure for
accepting exemption certificates.

This opinion is based on the facts presented. If there are any additional
or different facts, the opinion may change.

If you have any questions or need additional information, you may call
toll free 1-800-531-5441, ext. 50037 or the regular Austin number is
512-475-0037. You also may write to Tax Administration Division.

Sincerely,

Lindey Osborne
Tax Administration Division