Does a rodent barrier used to protect stored farm machinery qualify as exempt farm machinery and equipment?

Plain-English summary

A person who developed a product asked whether it must collect sales tax from farmers or whether the product is tax-exempt for farm use. The product is a barrier designed to keep mice from entering an encircled area — used by farmers to protect stored machinery and vehicles, with a life of about five years.

Kansas law, K.S.A. 79-3606(t), exempts "all sales of farm machinery and equipment or aquaculture machinery and equipment," together with repair and replacement parts and repair/maintenance services for such machinery. The Department ruled that the described rodent barrier does not qualify as farm machinery or equipment. As a result, the seller is required to register with Kansas and to collect and remit Kansas retailers' sales tax.

What this means for you

Selling a product to farmers, or a product used around farm equipment, does not by itself make the sale exempt. The farm-machinery exemption applies to machinery and equipment itself (plus qualifying parts and repair services) — not to every item a farmer buys.

• A protective barrier that shields stored equipment is not itself "farm machinery and equipment," so it is taxable.
• The seller must register, collect, and remit Kansas retailers' sales tax on these sales.
• The exemption in 79-3606(t) also depends on the purchaser certifying in writing (on the invoice or sales ticket the seller keeps) that qualifying farm machinery will be used only in farming, ranching, or aquaculture production — a requirement that is irrelevant here because the item does not qualify in the first place.

If you are unsure whether a specific product is "farm machinery and equipment," the safer course is to treat it as taxable unless the Department has confirmed otherwise.

Common questions

Is anything a farmer buys for the farm exempt from Kansas sales tax?
No. Only qualifying farm machinery and equipment (and its parts and repair services) is exempt under K.S.A. 79-3606(t). Other products a farmer buys can still be taxable.

Why is the rodent barrier taxable?
The Department found it does not meet the definition of "farm machinery and equipment," so it falls outside the 79-3606(t) exemption.

What does the seller have to do?
Register with Kansas and collect and remit Kansas retailers' sales tax on the product.

Would a written farm-use certificate make it exempt?
No. The certification requirement applies only to items that actually qualify as farm machinery and equipment; it cannot exempt an item that doesn't qualify.

Citations and references

• K.S.A. 79-3606(t) — exempts sales of farm machinery and equipment (and aquaculture machinery and equipment), repair and replacement parts, and repair/maintenance services, subject to a written farm-use certification by the purchaser.

Source

• Original ruling (DOCX): https://www.ksrevenue.gov/pildocs/rulings/P-1998-39.docx
• Kansas Policy Information Library: https://www.ksrevenue.gov/prpil.html

Original ruling text

Private Letter Ruling

Body:

Office of Policy & Research

April 28, 1998

XXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX

Dear Mr. XXXXXXXX:

The purpose of this letter is to respond to your letter dated March 28, 1998.

You generally stated in your letter: That you have developed a product. The product is a XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX to keep mice from entering an encircled area. This will be used by farmers for their stored machinery and vehicles. My question is do I collect sales tax from these farmers or does this qualify as tax exempt for farm use? The life of this product is probably about five years.

K.S.A. 79-3606(t) exempts from Kansas retailers’ and compensating 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 machinery and equipment. For the 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. Each purchaser of farm machinery and equipment or aquaculture machinery and equipment exempted herein must certify in writing on the copy of the invoice or sales ticket to be retained by the seller that the farm machinery and equipment or aquaculture machinery and equipment purchased will be used only in farming, ranching or aquaculture production. Farming or ranching shall include the operation of a feedlot and farm and ranch work for hire and the operation of a nursery;

It would be the opinion of the Kansas Department of Revenue that the item you described would not qualify as farm machinery or equipment and therefore, you are required to register, collect and remit to Kansas, retailers’ sales tax.

Sincerely,

Mark D. Ciardullo
Tax Specialist

MDC

Date Composed: 05/01/1998 Date Modified: 10/10/2001

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