Can a working farm buy a pellet gun used only to control varmints exempt from New York sales tax?

Plain-English summary

The operator of a working farm in New York asked whether it could buy a .25 caliber pellet gun — to be used 100% of the time to control varmints and protect crops and livestock — exempt from sales tax.

The Office of Counsel concluded the purchase is exempt:

• A pellet gun is tangible personal property, so it is normally taxable (Tax Law sections 1105(a), 1101(b)(6)).
• But Tax Law section 1115(a)(6)(A) exempts property used predominantly in the production of tangible personal property for sale by farming. Predominantly means more than 50% of the time (20 NYCRR 528.7(d)(1)).
• The petitioner represented that it (a) operates a farm, (b) that produces goods for sale, and (c) that the gun will be used exclusively in that production — like any other farm tool. So the gun qualifies for the exemption.
• The farmer claims the exemption by timely giving the vendor a properly completed Form ST-125 (Farmers and Commercial Horse Boarding Operators Exemption Certificate).

What this means for you

Farmers buying everyday tools

The farm-production exemption is function-based, not item-based: an ordinary item (here, a pellet gun) can be bought tax-free if it is used more than half the time in producing goods you sell by farming. Pest and varmint control that protects salable crops and livestock counts.

Documentation is everything

The exemption depends on your representations about how the item is used, and you must give the vendor Form ST-125. If the actual use falls below the predominant-use threshold, the exemption can fail.

Common questions

Q: A pellet gun isnt obviously farm equipment — why is it exempt?
A: The exemption turns on use, not the type of item. Used predominantly (more than 50%) in farm production for sale, it qualifies like any other tool.

Q: What does predominantly mean?
A: More than 50 percent of the time used or consumed in producing tangible personal property for sale by farming.

Q: How do I actually claim the exemption?
A: Give the seller a properly completed Form ST-125 at the time of purchase.

Q: Can I rely on this opinion?
A: It binds the Department only as to the petitioner and rests on the facts represented. Use it as guidance and confirm your own facts.

Citations and references

• Tax Law section 1105(a) (tax on retail sales of tangible personal property)
• Tax Law section 1115(a)(6)(A) (exemption for property used predominantly in farm production for sale)
• Tax Law section 1101(b)(6) (definition of tangible personal property)
• 20 NYCRR 528.7(d)(1) (predominantly means more than 50 percent)

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales_ao_2017.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a17_13s.pdf

Original ruling text

New York State Department of Taxation and Finance

TSB-A-17(13)S
Sales Tax
July 31, 2017

Office of Counsel
STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION

PETITION NO. S170313A

The Department of Taxation and Finance received a Petition for an Advisory Opinion from RED
REDACTED REDACTED REDACTED RED (“Petitioner”). Petitioner asks whether a pellet gun to be
used exclusively “to control varmints on a working farm” may be purchased exempt from sales tax. We
conclude, based on the facts provided, that such a purchase would be exempt from sales tax.

Facts
Petitioner advises that it operates a “working farm” in New York State. According to its petition,
Petitioner will be purchasing a .25 caliber pellet gun “to use 100% of the time to control varmints on [the]
farm in the production of tangible personal property for sale by farming.”

Specifically, Petitioner

indicates that this gun will be used, like other tools used by farmers, to control “pests” and protect crops
and/or livestock on the farm.

Analysis

Tax Law § 1105(a) imposes sales tax on the retail sale, except for resale, of tangible personal
property (TPP). However, Tax Law § 1115(a)(6)(A) exempts such purchases from sales tax when the
TPP is purchased for use “predominantly” in the production of TPP for sale by farming. “Predominantly”
means that the TPP must be used or consumed more than 50 percent of the time in the production for sale
of tangible personal property by farming. See 20 NYCRR 528.7(d)(1). See also TSB-A-14(10)S; TSBM-00(6)S. TPP is defined as “[c]orporeal personal property of any nature.” Tax Law § 1101(b)(6).
As noted above, Petitioner indicates that it will be purchasing a pellet gun for use on its “working
farm,” and that this gun will be used “100% of the time to control varmints on [its] farm in the production
of [TPP] for sale by farming.” A pellet gun is TPP and thus subject to sales tax per Tax Law § 1105(a).
However, based upon Petitioner’s representations that (a) it operates a farm, (b) that this farm produces
TPP for sale, and (c) that the gun being purchased will be used exclusively in the production of this TPP,

TSB-A-17(13)S
Sales Tax
July 31, 2017

-2-

we find that Petitioner may purchase this gun exempt from sales tax pursuant to Tax Law §
1115(a)(6)(A). Petitioner may claim this exemption by timely providing the vendor of the pellet gun with
a properly completed Form ST-125, Farmers and Commercial Horse Boarding Operator’s Exemption
Certificate.

DATED: July 31. 2017

/S/
DEBORAH R. LIEBMAN
Deputy Counsel

NOTE:

An Advisory Opinion is issued at the request of a person or entity. It is limited to the facts set
forth therein and is binding on the Department only with respect to the person or entity to
whom it is issued and only if the person or entity fully and accurately describes all relevant
facts. An Advisory Opinion is based on the law, regulations, and Department policies in
effect as of the date the Opinion is issued or for the specific time period at issue in the
Opinion. The information provided in this document does not cover every situation and is
not intended to replace the law or change its meaning.