Can a dairy cow hoof trimmer who does custom work for dairy farms buy his truck, tools, and supplies tax-free under New York's farming exemption?

Plain-English summary

A dairy cattle hoof trimmer whose only clients are dairy farms asked whether New York's farming exemption covers his purchases. Trimming cows' hooves prevents lameness so the animals stay active in milk production, so his work is part of the farm production process — and the regulations expressly allow someone who does custom work for a commercial farmer to buy the equipment tax-free (20 NYCRR 528.7(b), Example 3).

The Office of Counsel held that property used predominantly in farm production is exempt under Tax Law § 1115(a)(6)(A):

• Exempt: the hoof-trimming truck; the mounted tilt table, chute, and gates; tools/supplies to maintain the truck and equipment; supplies to sanitize the truck (nightly sanitizing prevents disease spread and is a "pivotal function… maintaining a controlled environment necessary for production," per Costco); cow-treatment tools and supplies; office supplies; a computer/tablet used to run animal-record reports for farmers; and protective clothing required for the work.
• Taxable: supplies to maintain the garage where the truck is stored (the garage itself isn't used in production), and the washing machine, soap, and supplies used to launder the protective clothing (the connection to production is "too attenuated," per Costco).

So the production tools and even report-running tech are exempt, but the building upkeep and the laundering of work clothes are not.

What this means for you

Custom farm-service providers (hoof trimmers, breeders, harvesters, sprayers)

You don't have to own a farm to use the exemption — equipment and supplies you use to do custom production work for commercial farmers can be bought tax-free under § 1115(a)(6)(A). Sanitation directly tied to production qualifies; general building upkeep and clothes-laundering do not.

Dairy and livestock operations

Items used predominantly in farm production — including computers used to run animal-record reports — are exempt; administrative-only and facility-maintenance items are not.

Accountants and tax professionals

Sort each purchase into production vs. administration/facility (20 NYCRR 528.7(c)). Production-linked sanitation is exempt (Costco); garage maintenance and laundry of protective clothing are taxable as too attenuated. Computers qualify if used predominantly in production (TSB-M-00(8)S).

Common questions

Q: I don't own a farm — can I still claim the farming exemption?
A: Yes. Doing custom production work for a commercial farmer lets you buy the equipment used in that work tax-free.

Q: Why is sanitizing the truck exempt but maintaining the garage taxable?
A: Nightly sanitizing is integral to production (preventing disease spread between farms); the garage is just storage, not part of production.

Q: Is laundering my protective clothing exempt since the clothing itself is exempt?
A: No. The laundry equipment and supplies are too far removed from production, so they're taxable even though the clothing is exempt.

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

Citations and references

• Tax Law § 1105(a) (sales tax on tangible personal property)
• Tax Law § 1115(a)(6)(A) (exemption for property used predominantly in farm production for sale)
• Tax Law § 1101(b)(19) (definition of farming); Agriculture and Markets Law § 301(2) (livestock)
• 20 NYCRR 528.7 (farming; administration vs. production; Examples 1 & 3)
• Matter of Costco Wholesale Corp., Tax Appeals Tribunal (Mar. 6, 2017); TSB-M-00(8)S

Source

• Landing page: https://www.tax.ny.gov/pubs_and_bulls/advisory_opinions/sales-ao-2020.htm
• Opinion: https://www.tax.ny.gov/pdf/advisory_opinions/sales/a20-52s.pdf

Original ruling text

New York State Department of Taxation and Finance
Office of Counsel

TSB-A-20(52)S
Sales Tax
October 27, 2020

STATE OF NEW YORK
COMMISSIONER OF TAXATION AND FINANCE
ADVISORY OPINION
The Department of Taxation and Finance received a Petition for Advisory Opinion from
[ REDACTED ] (“Petitioner”). Petitioner asks whether his occupation as a dairy cow hoof
trimmer exempts from sales tax the purchase of the following: 1) a hoof trimming truck, 2)
supplies and tools used to maintain the truck, 3) supplies and tools used to maintain the truck tilt
table and chute, 4) supplies and equipment to keep the truck sanitized, 5) cow treatment tools and
supplies, 6) office supplies, 7) a tablet to run reports for dairy farmers, 8) protective clothing, and
9) supplies to maintain the garage and the equipment and supplies necessary to clean protective
clothing. We conclude that Petitioner’s costs for items 1 - 8 are not subject to sales tax because
they fall under the farming exemption in Tax Law § 1115(a)(6)(A). Supplies to maintain the
garage and clean protective clothing fall outside of the production cycle and therefore are subject
to sales tax.
Facts
Petitioner performs work as a dairy cattle hoof trimmer. He trims the hoofs of dairy cows
used in the production of milk, and his only clients are dairy farmers. Cow hoofs require
trimming to prevent and cure lameness so that the animals can stand, walk, and eat properly,
allowing them to stay active in the milk production process. Petitioner travels to dairy farms and
trims the hoofs of the dairy cows using his own equipment and supplies. Petitioner’s truck is
exclusively used for hoof trimming and it has agricultural license plates. The truck is only
insured to travel to and from dairy farms and repair shops only.
Petitioner’s equipment is mounted permanently on the back of the truck and consists of a
hydraulic tilting table with a hydraulic unit, chute, and gates. The tilting table lifts the dairy cow
up on its side to allow Petitioner access to the cow’s hoofs. When not in use, Petitioner’s truck is
stored in his garage, which additionally houses tools and equipment used to maintain the rig,
such as welding equipment. The equipment mounted on Petitioner’s truck is regularly exposed
to dairy cow urine and manure, which is highly corrosive. Maintaining the strength of the
equipment is necessary to ensure animal safety. In addition to the welding equipment, the garage
is equipped with a pressure washer as the truck needs to be sanitized nightly to prevent the
spread of diseases between farms.
Petitioner is required to wear protective clothing necessary for the nature of the work
including boots, coveralls, hats, gloves, and face shields, as well as protective garments and

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TSB-A-20(52)S
Sales Tax
October 27, 2020

headgear used for welding. Petitioner uses a separate washing machine, laundry soap and
supplies solely for work gear. He stocks his garage with maintenance supplies for the garage
itself. Petitioner purchases office supplies used for the administrative part of the business,
including a computer, accounting software, ink, paper, and miscellaneous office supplies.
Petitioner also plans to use a tablet with software that will allow him to access the farmers’
databases and send reports directly to the farmers on the trim records for each dairy cow.
Analysis
Tax Law § 1105(a) imposes sales tax on the receipts from every retail sale of tangible
personal property, except as otherwise provided. The Tax Law exempts from sales tax tangible
personal property used or consumed predominantly in the production for sale of tangible
personal property by farming. See Tax Law § 1115(a)(6)(A). Farming “includes agriculture,
floriculture, horticulture, aquaculture and silviculture; stock, dairy, poultry, fruit, fur bearing
animals, … and raising, growing and harvesting crops, livestock and livestock products, as
defined by [Agriculture and Markets Law § 301(2)].” See Tax Law § 1101(b)(19); see also 20
NYCRR 528.7(b)(1). Agriculture and Markets Law § 301(2) defines livestock and livestock
product to include, but not be limited to “cattle, sheep, hogs, goats, horses, poultry.”
20 NYCRR 528.7 provides, in relevant part:
(b)(1) the term farming means and includes the following types of farming and activities.
(ii) stock, dairy, poultry, fruit, fur-bearing animal, truck and tree farming;
Example 1. Breeding, raising and feeding livestock, poultry, or other
animals, which produce a product for sale or are themselves a food
product, is farming.
Example 3. An individual who does not own a farm but does own farm
equipment which he uses to perform custom work for a commercial
farmer may purchase such equipment tax-free since the equipment will be
used in farming.
Activities in farming are classified as administration, production, or distribution, but only
farming activities that qualify as farm production are eligible for exemption under Tax Law §
1115(a)(6)(A). See 20 NYCRR 528.7(c). Administration includes activities such as sales
promotion; general office work; credit and collection; purchasing; maintenance; transporting,
receiving, and testing of raw materials; and clerical work in production such as preparation of
work production and time records. Tangible personal property used in administrative activities
that are related to farm production are considered to be used in farm production. See 20 NYCRR
528.7(c)(1)(i).

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TSB-A-20(52)S
Sales Tax
October 27, 2020

Farm production in the case of animals begins at the beginning of the life cycle.
Production ceases when the product is ready for sale in its natural state. 20 NYCRR
528.7(c)(1)(ii). “Production ceases when cattle will be processed into meat, raw milk into butter,
cheese or bottled milk, … by a related industry, whether such industry is owned by the farmer or
another.” 20 NYCRR 528.7(c)(1)(ii) Example 1.
Tangible personal property is exempt only when the property is used or consumed
predominantly in farm production. See TSB-M-00(8)(S). Dairy farming and the tangible
personal property purchased predominantly for use in dairy farming qualify for the Tax Law §
1115(a)(6)(A) exemption. Petitioner provides hoof trimming services solely to dairy cows.
Therefore, Petitioner’s services are provided as part of the farm production process.
Petitioner’s hoof trimming truck, tilt table, chute and gates, supplies and tools used to
maintain truck, tilt table and chute, and cow treatment tools and supplies are all predominantly
used in the production phase of farming. Petitioner states that the truck must be sanitized nightly
to ensure that diseases are not spread from farm to farm. Sanitizing the truck therefore provides
“a pivotal function during the production process in maintaining a controlled environment
necessary for production” and therefore qualifies for the Tax Law § 1115(a)(6)(A) exemption.
See Matter of Costco Wholesale Corporation, Tax Appeals Tribunal, March 6, 2017.
Office supplies, including computers, tablets, ink, and miscellaneous office supplies fall
under farming administration activities. However, the purchase of computers qualifies for
exemption from state and local sales and use tax if the computer is used predominantly in farm
production. See TSB-M-00(8)S. A computer is considered to be in farm production when it is
used for running reports on animal records, preparing tags to label farm animals, and performing
agricultural research, among other uses. Id. As previously discussed, Petitioner’s computer is
used in accounting for the hoof trimming business and the tablet is used to prepare reports
directly for farmers with trim records for cows serviced by Petitioner. Therefore, these uses
would qualify these services for the Tax Law § 1115(a)(6)(A) exemption.
Petitioner’s protective clothing required to perform its services would be exempt from
sales tax. Petitioner also asked whether laundering charges for such clothing would be exempt.
Petitioner has a separate washing machine solely for work gear with laundry soap and supplies.
However, unlike the sanitary equipment for Petitioner’s truck, the connection between laundry
equipment and supplies and Petitioner’s performing production activities “is too attenuated” to
justify the exemption. See Matter of Costco Wholesale Corporation, Tax Appeals Tribunal,
March 6, 2017. Therefore, Petitioner’s equipment and supplies used to clean the protective
clothing fall outside the production cycle and are therefore subject to sales tax.

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TSB-A-20(52)S
Sales Tax
October 27, 2020

Finally, Petitioner asks whether the supplies to maintain the garage where his truck is
stored are taxable. Although the garage houses the truck that is used predominantly in farm
production, the garage itself is not used in the production process. Therefore, supplies purchased
to maintain the garage would not fall under the Tax Law § 1115(a)(6)(A) exemption and remain
taxable.
DATED: October 27, 2020

/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.