Were mites sold for fire-ant control exempt when used on a farm or ranch?

Plain-English summary

The described mite product qualified for a sales-tax exemption when purchased for exclusive use on a farm or ranch. The letter treated the mites as farm or ranch work animals, comparing them with ladybugs, mantises, and earthworms.

A purchaser claiming agricultural use had to give the seller a properly completed exemption certificate. The answer was expressly limited to the facts presented.

STAR adds an alert that H.B. 268 amended the Tax Code and, effective January 1, 2012, required people claiming exemptions for certain agricultural and timber products to apply for and provide a Comptroller-issued registration number. The 1985 documentation instruction therefore should not be treated as a complete statement of current requirements.

Common questions

Was any use of the mite product exempt? No. The letter required exclusive use on a farm or ranch. How did the letter classify the mites? As farm or ranch work animals. What documentation did the 1985 letter require? A properly completed agricultural-use exemption certificate, subject to the later STAR alert.

Citations and references

The reproduced letter cites no numbered statute or rule. Its STAR alert identifies H.B. 268 from the 82nd Regular Legislative Session and a January 1, 2012 effective date.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8505L0641E09

Original ruling text

ALERT: This document may be affected by changes to the Tax Code which was amended by H.B. 268, 82nd Reg. Legislative Session, 2011. The amendment required persons claiming a sales tax exemption for certain agricultural and timber products to apply for and provide a registration number issued by the Comptroller, effective 01/01/2012.

May 6, 1985

Dear ***:

Thank you for your letter of April 19, 1985, concerning the tax status
of your product, PRODUCT A.

PRODUCT A, as described in the enclosed brochure, will qualify for exemption
from sales tax when purchased for exclusive use on a farm or ranch.

The mites will be exempt as farm or ranch work animals as are lady bugs, mantises
and earthworms.

A purchaser must issue a properly completed exemption certificate when claiming
agricultural use.

This opinion is based on the facts presented. If there are additional or different
facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the Tax
Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division