Is rodent control (structural pest control) on a farm or ranch a taxable service in Texas, and can rat poison be bought tax-free for agricultural use?

Plain-English summary

A taxpayer asked the Comptroller's office about the taxability of pest control work performed on farms or ranches — specifically, treating barns or storage facilities to control rodents.

The Comptroller's answer drew a line between the service and the product:

• Hiring someone to perform structural pest control (treating a barn or storage facility for rodents) is a taxable real property service under Rule 3.356(a)(8) and (b), Real Property Services. No agricultural exemption applies to this labor.
• Buying rat poison over the counter, on the other hand, can be exempt from sales tax if the buyer gives the seller a properly completed exemption certificate and the poison will be used exclusively on a farm, ranch, or commercial greenhouse to protect an agricultural product that will be sold in the regular course of business.

In short: pay someone to spray for rodents and it's taxable; buy the poison yourself for qualifying agricultural use and it can be tax-exempt.

What this means for you

Farmers and ranchers

If you hire a pest control company to treat your barns or storage buildings for rodents, expect to pay sales tax on that service — there is no agricultural exemption for structural pest control labor. But if you instead buy rat poison yourself over the counter to use exclusively on your farm, ranch, or commercial greenhouse to protect an agricultural product you intend to sell, you may be able to purchase it tax-free by giving the seller a properly completed exemption certificate.

Pest control businesses serving agricultural customers

Structural pest control, including rodent control in barns and storage facilities, is taxable under Rule 3.356(a)(8) and (b) regardless of whether the customer is a farm or ranch. Don't extend an agricultural exemption to your labor charges — the exemption in this ruling applies only to the retail sale of rat poison itself, and only when the customer's use and exemption certificate qualify.

Common questions

Q: Is pest control to get rid of rodents in a barn taxable in Texas?
A: Yes. The ruling states structural pest control is a taxable service under Section (a)(8) and Section (b) of Rule 3.356, Real Property Services, and that no agricultural exemption exists for this service.

Q: Can I buy rat poison tax-free for use on my farm?
A: The ruling says a properly completed exemption certificate may be accepted for the sale of rat poison sold over the counter, but only if it is used exclusively on a farm or ranch or commercial greenhouse to protect an agricultural product to be sold in the regular course of business.

Q: Does this ruling apply to my exact situation?
A: This opinion is based on the facts presented to the Comptroller's office; the letter itself notes that if there are any additional or different facts, the opinion may change. It was also issued to a specific, redacted taxpayer, so it can only be relied on directly by that taxpayer.

Citations and references

Rules cited:

• 34 Tex. Admin. Code Rule 3.356(a)(8) and (b), Real Property Services (structural pest control is a taxable service)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9302L1224B06

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.

February 26, 1993

Dear ***:

Thank you for your letter of February 3, 1993, regarding the taxability
of pest control work performed on farms or ranches. Specifically, you
question the taxability of treating barns or storage facilities for the
control of rodents.

Structural pest control is a taxable service. Please refer to Section
(a)(8) and Section (b) of Rule 3.356, Real Property Services. No
agricultural exemption exists for this service. However, a properly
completed exemption certificate may be accepted for the sale of rat
poison sold over the counter if used exclusively on a farm or ranch or
commercial greenhouse to protect an agricultural product to be sold in
the regular course of business.

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