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Ezel / Tax Rulings / TX
TX 9806604L Sales and/or Use Tax (State,Local,MTA) 1998-06-22

Can a Texas farmer or rancher buy an advertising sign tax-free using a farm exemption certificate?

Short answer: Yes -- a farmer or rancher can purchase a sign used to market their products (for example, a 'hay for sale' sign) tax-free by giving the seller an agricultural exemption certificate instead of paying sales tax. The Comptroller confirmed this in a short follow-up letter after a phone conversation, noting the producer of the hay could buy such a sign tax-free, and enclosed a sample exemption certificate the requester could copy and use.

Apply this to your situation

This page answers the general question as of 1998. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1998
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 Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded.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

This short letter follows up a phone conversation about whether farmers and ranchers can buy signs used to market their products tax-free. The Comptroller confirmed they can — using the example of a sign advertising "hay for sale," which the producer of the hay could purchase tax-free by giving the seller an agricultural exemption certificate instead of paying sales tax. A sample exemption certificate was enclosed for the requester to copy and use.

What this means for you

Farmers and ranchers

If you're buying a sign to advertise or market products you produce (like a "hay for sale" sign), you can purchase it tax-free using an agricultural exemption certificate rather than paying sales tax at the register.

Sign vendors selling to agricultural producers

You can accept a properly completed agricultural exemption certificate from a farmer or rancher purchasing a sign used to market their own farm/ranch products, in lieu of collecting sales tax.

Common questions

Q: Can I buy any sign tax-free as a farmer?
A: This letter addresses a sign used to market the farmer's own products (like a "hay for sale" sign); it doesn't address signs unrelated to marketing farm/ranch products.

Q: What do I give the seller instead of paying tax?
A: An agricultural exemption certificate, per this letter.

Source

Original ruling text

June 22, 1998

Dear Mr. **:

I just want to take a minute to follow up our conversation of June 19, 1998
with a written response.

Farmers and ranchers may purchase signs for use in marketing their products tax
free by issuing you an exemption certificate in lieu of paying sales tax. You
specifically mentioned a sign advertising "hay for sale". Such a sign could be
purchased tax free by the producer of the hay.

I am enclosing an exemption certificate that you may copy and use.

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

You may call me toll free at 1-800-531-5441, ext. 3-4680. The direct line is
512/463-4680. You may also write to Tax Policy, Comptroller of Public
Accounts. The email address is .

Sincerely,

Al Van Allen
Tax Policy Division

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