Was electricity used to process tomatoes at a packing house exempt when the building was separated from the farm's crops by a rail line?

Plain-English summary

A tomato packing house was located on the farm's property but separated from the crop area by a rail line. The county property appraiser assessed the packing-house parcel for agricultural use.

Florida treated the packing house as contiguous to the farm and exempted electricity used there to process tomatoes. The Right to Farm Act's definition of a farm includes land, buildings, support facilities, machinery, and other appurtenances used to produce farm products.

The electricity exemption applied only to production or processing use on the farm. The ruling stated that exempt electricity must be separately metered from electricity used for other purposes; a central meter serving both exempt and taxable uses made the electricity purchase taxable.

What this means for you

A physical divider does not necessarily break farm contiguity when the packing facility remains on agricultural land and supports processing of the farm product. Metering remains a separate and essential condition.

Common questions

Did the rail line prevent the packing house from being part of the farm? No.

Why did the property qualify? It was assessed for agricultural use and remained contiguous to the farm under the facts reviewed.

Does mixed-use electricity qualify through one central meter? No, according to the advisement.

Citations and references

• Fla. Stat. § 212.08(5)(e)2. (electricity used to produce or process agricultural products)
• Fla. Stat. § 823.14(3)(a) and (b) (farm and farm-operation definitions)
• Fla. Stat. § 213.22 (Technical Assistance Advisements)

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 08A-005

Original ruling text

SUMMARY
QUESTION: Whether electricity used for processing tomatoes at a packing house, separated from the
tomato farm by a rail line, is exempt from sales tax.
ANSWER: Since the land where the packing house is located is zoned for agricultural use and is only
separated from the crops by a rail line, the packing house is contiguous
March 5, 2008
XXX
Re:

Technical Assistance Advisement 08A-005
XXX
FEI No.- XXX
Sales Tax – Electricity Used for Processing Tomatoes
Sections 212.08(5)(e), F.S. and 823.14, F.S.

Dear XXX
This response is in reply to your letter to the Department, dated October 12, 2007, in which you are
requesting the Department's issuance of a Technical Assistance Advisement ("TAA") pursuant to s.
213.22, F.S., and Chapter 12-11, F.A.C., regarding the referenced matter. An examination of your petition
has established that you have complied with the statutory and regulatory requirements for issuance of a
TAA. Therefore, the Department is hereby granting your request for issuance of a TAA.
ISSUE
Whether electricity used for processing tomatoes at your packing house, separated from your farm by a
XXX, is exempt from sales tax.
REQUESTED DETERMINATION
As stated in your letter, your packing house is located on your farm, although separated by a XXX. You
have attached aerial photos of the property that include the parcel folio number. The property is assessed
by your county property appraiser as agricultural use.
LAW AND DISCUSSION
As provided in Section 212.08(5)(e)2., F.S., electricity used for the production or processing of
agricultural products on a farm is exempt from sales tax imposed by Chapter 212, F.S. This exemption
only applies if the electricity is separately metered from the electricity used for non-production or nonprocessing purposes. If the electricity is centrally metered, and the electricity is used for both tax-exempt
and taxable purposes, the purchase of the electricity is subject to tax

XXX XXX
Page 2 of 2
Although the term “farm” is not defined in Chapter 212, F.S., the term is defined in the Florida Right to
Farm Act in Section 823.14(3)(a), F.S., as “the land, buildings, support facilities, machinery, and other
appurtenances used in the production of farm or aquaculture products.” The term “farm operation” as
defined in Section 823.14(3)(b), F.S., means “. . . all conditions or activities by the owner, lessee, agent,
independent contractor, and supplier which occur on a farm in connection with the production of farm
products and includes, but is not limited to, the marketing of produce at roadside stands or farm markets;
the operation of machinery and irrigation pumps; the generation of noise, odors, dust, and fumes; ground
or aerial seeding and spraying; the application of chemical fertilizers, conditioners, insecticides,
pesticides, and herbicides; and the employment and use of labor.” (E.S.)
CONCLUSION
Since the land where the packing house is located is zoned for agricultural use and is only separated from
the crops by a XXX, the packing house is contiguous to the farm, and the electricity used for processing
the tomatoes is exempt from sales tax.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S. which is binding on
the department only under facts and circumstances described in the request for this advice as specified in
s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above.
You are advised that subsequent statutory or administrative rule changes or judicial interpretations of the
statutes or rules upon which this advice is based may subject similar future transactions to a different
treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public records
under Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S.
Confidential information must be deleted before public disclosure. In an effort to protect confidentiality,
we request you provide the undersigned with an edited copy of your request for Technical Assistance
Advisement, the backup material and this response, deleting names, addresses and any other details which
might lead to identification of the taxpayer. Your response should be received by the Department within
15 days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may contact me
directly at (850) 922-4838.
Sincerely,

Richard R. Parsons
Tax Law Specialist
Technical Assistance & Dispute Resolution
Record ID: 37129