Does a DC-powered siren used to call or gather cattle on a farm or ranch qualify for the farm machinery and equipment sales tax exemption under Rule 3.296(a)(5)(A)?

Subject

Siren — Used To Call Or Gather Cattle — Qualifies As Exempt Farm Machinery Under Rule 3.296(a)(5)(A)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9312L1275A13

Plain-English Summary

A manufacturer was beginning production of a siren meant to be used on a farm or ranch to call or gather cattle so they could be fed and/or worked. The siren ran on direct current (wired to a vehicle battery) rather than the alternating current used in a house or office, and because it did not run on AC power, the letter states it "would not have any other use." The taxpayer asked the Comptroller whether this siren would qualify for the sales tax exemption for farm machinery and equipment under Rule 3.296(a)(5)(A).

The Comptroller's response was direct: the siren qualifies as machinery or equipment as defined in Rule 3.296(a)(5)(A) when used on farms or ranches. As with all STAR letter rulings, the response notes that it is based on the specific facts presented, and that different facts — even if similar — could lead to a different answer.

What This Means For You

If you manufacture or sell equipment marketed for farm or ranch use: This letter shows the Comptroller treating a single-purpose device (one that cannot be used for anything but the farm/ranch task, because it lacks the AC power source needed for general use) as qualifying farm machinery or equipment under Rule 3.296(a)(5)(A). The letter's own facts emphasize that the DC-only power source was what ruled out any other use for the siren.

ALERT — timing matters: This letter was issued December 13, 1993, and answers only the specific Rule 3.296(a)(5)(A) machinery/equipment question asked. The document carries an ALERT that Texas Tax Code provisions were later amended by H.B. 268 (82nd Regular Legislative Session), effective January 1, 2012. That amendment required persons claiming a sales tax exemption for certain agricultural and timber products to apply for and provide a Comptroller-issued registration number. Because this 1993 letter predates that 2012 change by nearly two decades, anyone relying on this letter today should confirm separately whether the registration-number requirement now applies to their situation — this letter itself does not address registration numbers at all, since that requirement did not yet exist when it was written.

If you're citing this letter: Remember that STAR letter rulings can only be relied upon by the taxpayer to whom they were directly issued, and this letter's holding turns on the specific facts given (a DC-powered, single-purpose siren with no alternate use).

Q&A

Q: Does a siren used to call or gather cattle qualify for the farm machinery and equipment exemption?
A: Yes, according to this letter — the Comptroller found that such a siren qualifies as machinery or equipment under Rule 3.296(a)(5)(A) when used on farms or ranches.

Q: Does it matter that the siren runs on DC power from a vehicle battery instead of AC power?
A: The facts presented emphasize this point: because the siren does not run on AC power, it "would not have any other use" beyond the farm/ranch task. That single-purpose nature was part of the facts the Comptroller relied on in reaching its answer.

Q: Does the 2012 registration-number requirement (H.B. 268) apply to this ruling?
A: This 1993 letter does not mention any registration-number requirement — that requirement was created later by H.B. 268 (82nd Regular Session), effective January 1, 2012, for persons claiming exemptions on certain agricultural and timber products. Since the letter predates that law, it does not say whether or how the registration requirement would affect a claim like the one described here; that would need to be confirmed separately.

Q: Can another taxpayer rely on this letter for their own farm equipment?
A: The letter itself states that the opinion "is based on the facts as presented" and that "different facts though similar may result in different answers," so its holding is specific to a DC-only, single-use cattle-calling siren.

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.

December 13, 1993

Dear Mr. **:

This is in response to your letter dated November 30, 1993, regarding
sales tax as it applies to a siren used on a farm or ranch.

FACTS: A client is beginning to manufacture a siren that will be used
to call or gather cattle to be fed and/or worked. The siren will be
powered by direct current (wired to a vehicle battery) versus
alternating current such as in a house or office. The siren does not
run on AC power;therefore, the siren would not have any other use.

QUESTION: Does the siren qualify for exemption under Rule 3.296
(a)(5)(A)?

RESPONSE: The siren qualifies as machinery or equipment as defined in
Rule 3.296(a)(5)(A) when used on farms or ranches.

This opinion is based on the facts as presented. Different facts
though similar may result in different answers. If you have any
questions or need moreinformation, please write or call me toll free
at 1-800-531 -5441, extension 50330, or 512-475-0330.

Sincerely,

Bettie Peterson
Tax Administration Division

NOTE: Previous Accession Number 9311137L.2 and/or 9311137L