006.05.212-GR-51. EXEMPTIONS FROM TAX - FARM MACHINERY AND EQUIPMENT, TIMBER HARVESTING EQUIPME...
AR ADC 006.05.212-GR-51Arkansas Administrative Code
Ark. Admin. Code 006.05.212-GR-51
006.05.212-GR-51. EXEMPTIONS FROM TAX - FARM MACHINERY AND EQUIPMENT, TIMBER HARVESTING EQUIPMENT:
1. “Farm equipment and machinery” means agricultural implements used exclusively and directly for the agricultural production of food or fiber as a commercial business or the agricultural production of grass sod or nursery products as a commercial business. Farm equipment and machinery does not include implements used in the production and severance of timber, motor vehicles that are subject to registration, airplanes, or hand tools.
a. The following agricultural implements are exempt provided they meet the requirements of GR-51(C)(1) and GR-51(C)(2): Combines, cotton pickers, cotton module builders, cotton trailers, cultivators, discs, farm tractors, (other than garden tractors) harrows, irrigation equipment, milking equipment including milking machines, mechanical pickers, planters, plows, rotary hoes, sprayers, spreaders and threshing machines.
2. “Irrigation equipment” means (i) pipes, hoses, tubing and accessories to the pipes, hoses and tubing which deliver irrigation water from the water source to the crops regardless of whether the equipment becomes affixed to real property; and, (ii) pumps, gates, and other equipment other than pipes, hoses and tubing, which is movable and does not become affixed to real property. Irrigation equipment, other than pipes, hoses, and tubing, which is designed or intended to be permanently attached or incorporated into real property is not exempt.
f. Examples of non-exempt items include (i) a machine owned by a commercial farmer but also used at a location other than the farming property (such as a duck club or deer camp); (ii) a machine owned by a commercial farmer but also used for any purpose at any time for activities other than commercial farming, even while located at the commercial farm (such as pleasure riding, household activities, residential yard work, gardening, hunting, and fishing); and (iii) a machine purchased by a commercial farmer who also uses the machine to produce food or fiber primarily for his own consumption.
D. PROOF OF ENTITLEMENT. Sellers of farm equipment and machinery, which the purchaser claims as an exempt transaction, should refer to GR-79 concerning exemptions. As an alternative to an exemption certificate, a seller may accept a certification from the purchaser that the item (i) will be used exclusively in the agricultural production of food or fiber as a retail business; and either (ii) used directly in the actual agricultural production of food or fiber to be sold in processed form or at retail; or (iii) used directly in the agricultural production of farm products to be fed to livestock or poultry, which is to be sold ultimately in processed form at retail. The suggested certification form appears at the end of this rule.
Example: A fertilizer spreader or seed spreader, or chemical applicator purchased by a farmer would qualify for the farm machinery exemption if used exclusively by a farmer in applying fertilizer, planting seed, or applying agricultural chemicals as part of the agricultural production of food, fiber, grass, sod, or nursery products as a business. The farm machinery exemption will also be available to a fertilizer dealer, seed company, or other similar business upon the purchase of these same items provided the items are used exclusively and directly by the business in applying fertilizer, planting seed, or applying agricultural chemicals for farmers.
1. In order for the machinery or equipment and related attachments to be subject to the rebate, it must be (i) purchased by a person who commits more than fifty percent (50%) of his or her activities to the harvesting of timber; and (ii) used exclusively in the off-road activity of harvesting of timber.
2. Only complete systems or units that operate exclusively and directly in the off-road harvesting of timber are subject to the rebate of tax. The equipment and related attachments meet this requirement if they are used in harvesting timber from the time the tree is severed from the ground through the point at which the tree or its parts in any form have been loaded in the field in or on a truck or other vehicle for transport to the place of use. Examples of such equipment include skidders, feller bunchers, delimbers of all kinds, and bulldozers equipped with grapples used as skidders.
Commercial Farming Machinery & Equipment Sales Tax Exemption Certification
I, __________(purchaser's name - please print), am engaged in, or provide services for, the production of __________(products grown or raised) as a commercial farming business. The farm machinery and equipment
I am purchasing will be used exclusively and directly in the agricultural production of food and fiber to be sold in the commercial marketplace OR used directly in the agricultural production of farm products to be fed to livestock or poultry which will be sold in processed form at retail. I am aware that this claim for exemption will be reviewed by the Department of Finance and Administration. I am also aware that any false representation made by me in an attempt to purchase farm machinery and equipment free from Arkansas sales tax will result in the assessment of tax, penalty, and interest against me and is punishable as a misdemeanor under Arkansas law.
Signature of Purchaser | Date | Telephone Number |
Address | City | State | Zip |
*These certifications shall be kept on file by the seller for six years from the date of sale for audit purposes.
Credits
AUTHORITY: Ark. Code Ann. §§ 26-52-403; 26-52-431
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.05.212-GR-51, AR ADC 006.05.212-GR-51
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