When did Louisiana's direct-from-the-farm exemption apply to livestock, poultry, produce, and horticultural products?

Plain-English summary

A farm product qualified only when it remained in the form produced on the farm and was sold directly by its producer.

The physical sales location did not control. A producer's sale could be “direct from the farm” away from the farm, but a dealer's sale of another producer's product remained taxable.

Product condition

The exemption covered livestock, poultry, and other farm products in their produced state. Processing the item into a different product broke the exemption: the ruling contrasted exempt cucumbers and strawberries with nonqualifying pickles and strawberry jam.

Who counted as the producer

For livestock or poultry, the producer raised the animal from birth or hatching through sale. For eggs, milk, and other livestock products, the producer owned the production animals.

For plants, shrubbery, trees, and other horticultural products, the producer grew them from seed or seedling, or added substantial commercial value through purposeful cultivation and care away from the sales display location.

A nursery or garden center that acquired a plant and immediately displayed it for sale did not become its producer merely because the plant grew while waiting to be sold.

Sellers with mixed inventory

A dealer selling both self-produced and acquired farm products could exempt only the self-produced items. State sales or use tax had to be collected on products produced by others.

Common questions

Q: Did the sale have to occur at the farm?

A: No. The ruling said the location did not matter when the producer made the sale.

Q: Did jam made from a farmer's strawberries qualify?

A: No. The ruling treated jam as a different processed product.

Q: Did ordinary care at a garden-center display make the seller the producer?

A: No. The ruling required growing from seed or seedling or substantial value-adding cultivation away from the display location.

Q: Could a farmer exempt goods bought from another farm?

A: No. Only products the seller produced qualified.

Citations and references

• La. R.S. 47:305(A)(1) — direct-from-the-farm exemption quoted and applied in the ruling
• LAC 61:III.101.C — Revenue Ruling authority and reliance statement

Source

• Landing page: Louisiana Department of Revenue Policies
• Original PDF: LA Revenue Ruling 02-017

Original ruling text

Revenue Ruling
No. 02- 017
Sales and Use Tax
October 23, 2002
Sales Tax Exemption Applies to Sales of Farm Products “Direct from the Farm” by the
Producers

The purpose of this Revenue Ruling is to discuss the requirements that producers and sellers of
farm products must meet in order for their sales to qualify as non-taxable sales “direct from the
farm”.
Louisiana Revised Statute 47:305(A)(1) provides as follows:
The gross proceeds derived from the sale in this state of livestock, poultry, and
other farm products direct from the farm are exempted from the tax levied by this
Chapter, provided that such sales are made directly by the producers. When sales
of livestock, poultry, and other farm products are made to consumers by any
person other than the producer, they are not exempted from the tax imposed by
this Chapter.
In order for this exemption from tax collection to apply,
•

The products sold must be in the state that the products were produced on the farm and not
have been processed into different products. For example, cucumbers and strawberries are
considered farm products, but derivatives of those products, such as pickles and strawberry
jam, are not considered products sold “direct from the farm”.
and

•

The products must be sold directly by the producers of the products.

On sales of livestock or poultry, the producers will be the persons who raise the livestock or
poultry from the time of its birth or hatching to the time of its sale. On sales of eggs, milk, or
other livestock products, the producers will be the persons who own the production livestock. In
cases of plants, shrubbery, trees, or other horticultural products, the producers will be the persons
who grow the products from seed or seedling, or the persons whose purposeful cultivation and
care of the products away from a sales display location adds substantial commercial value to the
products. Nurseries and garden centers who purchase or acquire horticultural products from
others, and immediately offer or display those products for sale, will not be considered the
producers of those products, even though the products might experience some growth while in
the care of the nurseries or garden centers awaiting sale. Sales directly by producers will be
considered sales “direct from the farm”, regardless of the locations where the sales are made.

Revenue Ruling No. 02-017
Page 2 of 2

Dealers in livestock, poultry, and other farm products who sell both products that they have
produced and those that they have not produced are authorized by La. R.S. 47:305(A)(1) to
exempt the sales tax only on sales of products that they have produced. The state sales or use tax
must be collected on their sales of products produced by others.
Questions concerning this matter can be directed to the Taxpayer Services Division at (225) 2197356.
Cynthia Bridges
Secretary
By:

Raymond E. Tangney
Senior Policy Consultant
Policy Services Division

A Revenue Ruling is written to provide guidance to the public and to Department of Revenue employees. It
is issued under Section 61:III.101(C) of the Louisiana Administrative Code to apply principles of law to a
specific set of facts. A Revenue Ruling does not have the force and effect of law and is not binding on the
public. It is a statement of the department's position and is binding on the department until superseded or
modified by a subsequent change in statute, regulation, declaratory ruling, or court decision.