When was alfalfa seed exempt from Washington personal property tax after harvest?

Plain-English summary

The Washington Attorney General concluded in 1963 that alfalfa seed sold and delivered to a processor was not exempt from property tax merely because it would be shipped out of Washington by the following April. The AG said the shipment-based exemptions for certain grains and vegetables did not cover alfalfa seed: it was not a grain ordinarily processed into flour or an edible vegetable product within those statutory definitions.

A different exemption applied when the original farmer-producer still owned the seed on January 1 following harvest. The opinion said this producer-ownership exemption covered seed stored in Washington even if it had been grown in another state. Whether the processor already owned the seed under a sales contract depended on the parties’ intent and required examination of the contract.

Currency note

This opinion was issued in 1963. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did shipping alfalfa seed out of state qualify it for the grain exemption?
A: No. The AG said alfalfa seed was outside the particular grain and vegetable categories in that exemption.

Q: What if the farmer-producer still owned the seed on January 1 after harvest?
A: The opinion said it was exempt for that year under the separate agricultural-product rule.

Q: Did growing the seed outside Washington change that producer exemption?
A: No. The AG said seed grown elsewhere and stored in Washington could qualify if ownership remained with the original producer.

Q: Did delivery to a processor always transfer ownership?
A: The opinion said passage of title depended on the contract and the parties’ intent, which had to be examined in each case.

Background and statutory framework

The AG compared the grain and vegetable exemption in RCW 84.36.140 and definitions in RCW 84.36.160 with the original-producer exemption in RCW 84.44.060. It distinguished a processor’s ownership after sale from storage while title remained with the grower.

Citations and references

The opinion discusses RCW 84.36.140, RCW 84.36.160, and RCW 84.44.060.

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/taxation-personal-property-tax-alfalfa-seed-when-exemption-applicable

Original opinion text

Attorney General John J. O'Connell

TAXATION ‑- PERSONAL PROPERTY TAX ‑- ALFALFA SEED ‑- WHEN EXEMPTION APPLICABLE.

(1) Alfalfa seed sold and delivered by the farmer-producer to a processor is subject to applicable property taxes even though it is shipped out of the state on or before April 30 of the first year in which it would otherwise be taxable.

(2) Alfalfa seed is exempt from property taxes otherwise applicable if owned by the farmer-producer on the first day of January following harvesting, and this exemption applies whether or not the seed was grown in another state and shipped into Washington for storage.

June 17, 1963

Honorable H. Maurice Ahlquist
State Representative, 11th District
Hilltop Ranch
Touchet, Washington

Cite as: AGO 63-64 No. 31

Dear Sir:

You have requested an opinion of this office on questions which we paraphrase as follows:

1. At harvest time the farmer-producer delivers alfalfa seed to the warehouse of a processor. The seed is sold to the processor under contract subject to final clean-out percentages and is in his hands on January 1 next succeeding the harvest. You ask whether the seed is subject to taxation even though shipped out of the state on or before April 30 of that year.

2. Would the seed be taxable if in the warehouse on January 1 of the year next succeeding the harvest, but still in the ownership of the farmer-producer?

3. Would the fact that the seed was grown on a farm in another state and then placed in a Washington warehouse make any difference?

We answer the first question in the affirmative and the second and third questions in the negative.

[[Orig. Op. Page 2]]

ANALYSIS

By RCW 84.36.140, 84.36.150, and 84.36.160, an exemption from property taxes otherwise applicable is provided for certain grains and flour, fruits, vegetables and fish. To qualify for the exemption such products must, among other things, be shipped out of the state on or before April 30 of the first year in which they would otherwise be taxable.

To come within the exemption provided by RCW 84.36.140, alfalfa seed must be classified as either a "grain" or a "vegetable" as those terms are used and defined in chapter 84.36 RCW. The other two categories exempted are clearly inapplicable.

RCW 84.36.140 and RCW 84.36.160 both have reference to "grains and flour," and the latter statute provides that:

"The term 'grains and flour' shall mean and include all raw whole grains in their usual marketable state; and grain flour in the hands of the first processor; but not any other grain product."

This definition does not specifically indicate which commodities are to be considered grain and which are not, but it is clear from the fact that the word "grains" is used in connection with the word "flour" that the statutory provisions under consideration are applicable only to those grains which are ordinarily made into flour. Thus, "grain" as used in these statutes would include wheat, rye, oats, barley, corn and similar products, but would not include commodities not normally used for processing into flour, such as alfalfa seed.

Since alfalfa is a member of the pea family, it is arguable that the "vegetable" exemption appearing in RCW 84.36.140 is applicable. However, the term "vegetable" is defined in RCW 84.36.160 as follows:

"The term 'vegetable and vegetable products' shall mean and include all raw edible vegetables, such as peas, beans, beets, and other vegetables; and all processed products of vegetables, suitable and designed for human consumption, while in the hands of the first processor."

It is clear from this definition that only those vegetables which are edible, or suitable and designed for human consumption are within the "vegetable" exemption portion of the statute. Alfalfa seed is not [[Orig. Op. Page 3]] generally used, or considered to be usable in this manner, so even if alfalfa seed were deemed to be a vegetable product the exemption still would not be applicable.

It is therefore the opinion of this office that alfalfa seed is not one of those products qualifying for an exemption under RCW 84.36.140.

There is, however, another exemption which will apply under certain circumstances. RCW 84.44.060 reads in material part:

". . . All agricultural and horticultural products other than forest products, livestock and fowls, ownership of which remains in the original producer thereof on the first day of January next succeeding the harvesting thereof shall be exempt from assessment for taxation for the said year."

Under this statute the alfalfa seed would be tax exempt for the year next succeeding its harvesting if, on January 1 of that year it is still in the ownership of the farmer-producer. On the other hand if, under the terms of the contract of sale with the processor, title has passed out of the producer before that date, there is no exemption. Whether title passes is a matter of intent between the parties and each contract would have to be examined to determine that point.

In answer to your last question, we are of the opinion that the exemption afforded by RCW 84.44.060 would apply to agricultural products grown in another state and shipped into Washington for storage, provided the ownership remains in the original producer on January 1, following harvesting. Of course, the state of origin has no bearing on the exemption discussed in question one.

We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

HENRY W. WAGER
Assistant Attorney General