Can a trailer used only to transport and store combine headers qualify for Illinois's farm-machinery and equipment exemption?

Plain-English summary

A trailer used solely to carry and store combine headers could qualify for Illinois's farm-machinery and equipment exemption.

Illinois distinguished these header carts from general transport vehicles. Modern combines could not travel between fields with large headers attached, so the trailer carried the head lengthwise on public roads and stored it when not installed.

Because harvesting machinery such as combines and combine heads could qualify for exemption, and the trailer's use was integrally connected to those heads, the Department said the header transport trailer also might qualify.

General exemption requirements

New or used machinery and equipment—including special-order equipment—used primarily in production agriculture could be exempt, as could individual replacement parts. The purchaser had to certify the primary production-agriculture use.

Machinery included major machines or components contributing to production agriculture. Equipment included independent devices essential to production agriculture. Ordinary real-property improvements such as fences, barns, roads, grain bins, silos, and confinement buildings were not exempt farm machinery.

What this means for you

Farmers buying header carts

Document the cart's exclusive or primary harvesting use and its integral role in moving combine heads, rather than treating it as a general-purpose trailer.

Dealers accepting the exemption

The purchaser must certify primary use in production agriculture under the cited rule.

Common questions

Q: Did Illinois say every farm trailer is exempt?
A: No. The reasoning depended on the header trailer's sole use and integral connection to exempt harvesting machinery.

Q: Could storage of the header count?
A: Yes. The GIL described both transport for installation and storage when not installed.

Q: Was purchaser certification required?
A: Yes.

Citations and references

• 35 ILCS 120/2-5(2) and 2-35 — farm-machinery exemption and production agriculture.
• 86 Ill. Adm. Code 130.305 — farm machinery and equipment, including harvesting machinery and purchaser certification.

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2011.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2011/st-11-0078.pdf

Original ruling text

ST 11-0078-GIL 09/19/2011 FARM MACHINERY & EQUIPMENT
The sale of certain types of tangible personal property used in production agriculture is not
subject to Illinois Retailers’ Occupation Tax and Use Tax. See 35 ILCS 120/2-5(2) and 86 Ill.
Adm. Code 130.305. (This is a GIL.)

September 19, 2011

Dear Xxxxx:
This letter is in response to your letter received in this office on August 29, 2011, in which you
request information. The Department issues two types of letter rulings. Private Letter Rulings
(“PLRs”) are issued by the Department in response to specific taxpayer inquiries concerning the
application of a tax statute or rule to a particular fact situation. A PLR is binding on the Department,
but only as to the taxpayer who is the subject of the request for ruling and only to the extent the facts
recited in the PLR are correct and complete. Persons seeking PLRs must comply with the
procedures for PLRs found in the Department’s regulations at 2 Ill. Adm. Code 1200.110. The
purpose of a General Information Letter (“GIL”) is to direct taxpayers to Department regulations or
other sources of information regarding the topic about which they have inquired. A GIL is not a
statement of Department policy and is not binding on the Department. See 2 Ill. Adm. Code
1200.120. You may access our website at www.tax.illinois.gov to review regulations, letter rulings
and other types of information relevant to your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
Enclosed please find pictures of header transport trailers. These units have an
exclusive purpose in life of moving corn and bean headers for a combine. Due to the
size of modern machinery it is no longer feasible to drive the combine from field to field
with the headers attached to the combine. Highways and field openings will not allow it.
Because of the exclusive and necessary use of this unit in farm operations does it
qualify for farm machinery exemption?

DEPARTMENT’S RESPONSE:
In general, the Illinois Retailers’ Occupation Tax is imposed upon the total gross receipts
received by retailers who make sales of tangible personal property to Illinois end users. Unless the
sales are specifically exempted, such retailers must collect and remit the sales tax. See 86 Ill. Adm.
Code 130.101.
In certain cases, the sale of tangible personal property used in production agriculture is not
subject to Illinois Retailers’ Occupation Tax and Use Tax. Production agriculture is defined under the
Retailers’ Occupation Tax Act as “the raising of or propagation of livestock; crops for sale for human
consumption; crops for livestock consumption; and production seed stock grown for the propagation
of feed grains and the husbandry of animals or for the purpose of providing a food product, including

the husbandry of blood stock as a main source of providing a food product. Production Agriculture
also means animal husbandry, floriculture, aquaculture, horticulture, and viticulture.” See 35 ILCS
120/2-35.
Under 86 Ill. Adm. Code 130.305 “Farm Machinery and Equipment”, Illinois sales tax does not
apply to the sale of machinery and equipment, both new and used and including that manufactured
on special order, used or leased for use primarily in production agriculture or for use in State or
Federal agricultural programs. The sale of individual replacement parts for such machinery and
equipment is also exempt. In order to obtain the exemption, the purchaser must certify to the use
primarily in production agriculture of the equipment or machinery. See Section 130.305(a).
Machinery means major mechanical machines or machine components thereof contributing to
the production agriculture process or used primarily in State or Federal agricultural programs.
Machinery would include such things as tractors, combines, balers, irrigation equipment and cattle
and poultry feeders. Improvements to real estate such as fences, barns, roads, grain bins, silos and
confinement buildings are not considered exempt farm machinery.
Equipment means any independent device or apparatus separate from any machinery, but
essential to production agriculture. Although equipment does not include ordinary building materials
affixed permanently to real estate, certain items of equipment can qualify for the exemption even
though they are installed as realty improvements. Such items of equipment include, but are not
limited to, farrowing crates, gestation stalls, poultry cages, portable panels for confinement facilities
and flooring used in conjunction with waste disposal machinery. In addition, note that other items
such as cattle chutes and crowding tubs may be exempt sales so long as these items are portable
and not sold to be affixed to real estate, inside or outside of farm structures.
As a general proposition, the exemption can include machinery and equipment that is used
primarily in harvesting, such as combines and combine heads, see subsections 130.305(f) and (i). As
we understand the function of combine header transport trailers, these are not general transport
vehicles, but are used solely to carry heads for installation on the combine or to store heads when
they are not installed on the combine. An example is transporting the head down the highway in a
lengthwise position when the farmer must use public roads to move harvesting equipment to another
field. Because the use of the header carts is so integrally connected to the combine heads, which
can qualify for the exemption, the combine header transport trailers also may qualify for the
exemption.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.

Very truly yours,

Richard S. Wolters
Associate Counsel
RSW:msk