Which repair items for a farmer's combine and tractor qualify for the Kansas farm machinery exemption?

Plain-English summary

The Department sorted out which repair items for a farmer's combine and tractor fall inside the farm machinery and equipment exemption and which do not. The short version: consumable repair and replacement parts (bolts, nuts, washers, cotter keys, hydraulic and motor oil) are exempt, but welding rods, oxygen, and acetylene are taxable because they are repair equipment, not machinery parts — and most general farm purchases are taxable.

The Department began with the exemption statute:

• The farm machinery and equipment exemption (K.S.A. 79-3606(t)). It exempts "all sales of farm machinery and equipment or aquaculture machinery and equipment, repair and replacement parts therefor and services performed in the repair and maintenance of such equipment," including machinery used in Christmas tree farming, but excluding passenger vehicles, trucks, trailers, and the like (other than a farm trailer) "as such terms are defined by K.S.A. 8-126."
• Most general farm items are taxable. "Aside from the farm machinery and equipment sales tax exemption, farmers and ranchers must usually pay sales tax on items purchased for use in farming and ranching operations." The Department listed "boots, gloves, work clothes, fencing materials, building materials, baling twine and wire, hand tools, etc." as taxable.
• Repair and replacement parts — exempt. "[B]olts, nuts, washers, cotter keys, hydraulic and motor oil used in the repair and maintenance of the combine and tractor would qualify as farm machinery and equipment repair and replacement parts, and therefore would come within the scope of the sales tax exemption in K.S.A. 79-3606(t), if the combine and tactor is used in farming and ranching."
• Repair equipment — taxable. "The purchase of the welding rods, oxygen and acetelyn would not be exempt from Kansas sales tax, pursuant to K.S.A. 79-3606(t), since these items are in the nature of repair equipment and not farm machinery and equipment."

What this means for you

Farmers repairing their own machinery

Parts you install into an exempt combine or tractor — bolts, nuts, washers, cotter keys, hydraulic and motor oil — are exempt repair and replacement parts, as long as the machinery is used in farming and ranching. Buy those with the farm machinery exemption.

The repair-equipment line

Consumables that are really tools of the repair process rather than parts of the machine — welding rods, oxygen, acetylene — are taxable. The test the Department applied is whether the item is a repair/replacement part of the exempt machinery or instead "repair equipment."

General farm supplies

Outside the machinery exemption, expect to pay sales tax on ordinary operating purchases: boots, gloves, work clothes, fencing and building materials, baling twine and wire, hand tools, and similar items.

Common questions

Q: Are bolts and motor oil to fix a farm combine taxable in Kansas?
A: No. Bolts, nuts, washers, cotter keys, and hydraulic and motor oil used to repair and maintain a combine or tractor used in farming are exempt repair and replacement parts under K.S.A. 79-3606(t).

Q: Are welding rods and gases exempt?
A: No. Welding rods, oxygen, and acetylene are taxable because they are in the nature of repair equipment, not farm machinery and equipment.

Q: Do farmers pay tax on general supplies like gloves and fencing?
A: Usually yes. Apart from the machinery exemption, items such as boots, gloves, work clothes, fencing and building materials, baling twine and wire, and hand tools are subject to Kansas sales tax.

Citations and references

• K.S.A. 79-3606(t) — the farm machinery and equipment exemption; covers the machinery, its repair and replacement parts, and repair/maintenance services. The Department read it to exempt consumable repair/replacement parts (bolts, nuts, washers, cotter keys, hydraulic and motor oil) but not repair equipment (welding rods, oxygen, acetylene), and not general farm supplies.
• K.S.A. 8-126 — supplies the vehicle definitions used in K.S.A. 79-3606(t) to exclude passenger vehicles, trucks, trailers, and the like (other than a farm trailer) from the exemption.

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: O-1998-02

Original ruling text

Opinion Letter

Body:

Office of Policy & Research

August 5, 1998

TTTTTTTTTTTT
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Dear Mr. TTTTTTTT:

We wish to acknowledge receipt of your letter dated April 29, 1998, regarding the application of Kansas Retailers’ Sales tax.

K.S.A. 79-3606(t) exempts from sales tax: “all sales of farm machinery and equipment or aquaculture machinery and equipment, repair and replacement parts therefor and services performed in the repair and maintenance of such equipment. For purposes of this subsection the term “farm machinery and equipment or aquaculture machinery and equipment” shall include machinery and equipment used in the operation of Christmas tree farming but shall not include any passenger vehicle, truck, truck tractor, trailer, semitrailer or pole trailer, other than a farm trailer, as such terms are defined by K.S.A. 8-126 and amendments thereto. . .”

Aside from the farm machinery and equipment sales tax exemption, farmers and ranchers must usually pay sales tax on items purchased for use in farming and ranching operations. Thus, purchases of boots, gloves, work clothes, fencing materials, building materials, baling twine and wire, hand tools, etc., are subject to sales tax in the state of Kansas.

Please be advised that it is the opinion of this department that both bolts, nuts, washers, cotter keys, hydraulic and motor oil used in the repair and maintenance of the combine and tractor would qualify as farm machinery and equipment repair and replacement parts, and therefore would come within the scope of the sales tax exemption in K.S.A. 79-3606(t), if the combine and tactor is used in farming and ranching.

The purchase of the welding rods, oxygen and acetelyn would not be exempt from Kansas sales tax, pursuant to K.S.A. 79-3606(t), since these items are in the nature of repair equipment and not farm machinery and equipment.

For your convenience, I have enclosed a question and answer format, wherein the subject matter is farm machinery and equipment.

If I may be of further assistance, please contact me at your earliest convenience at (785) 296-7776.

Sincerely yours,

Thomas P. Browne, Jr.
Tax Specialist

TPB

Enc

Date Composed: 09/02/1998 Date Modified: 10/10/2001

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