Which tractor, farm, and off-highway tires qualified for Texas's agricultural sales-tax exemption?

Plain-English summary

Rule 3.296(e)(1) exempted repair or replacement parts used exclusively on farm or ranch machinery or equipment. The letter specifically included tractor tires, tires used on motor vehicles not licensed for highway use, and tires designated by the manufacturer for farm or off-highway use only.

The purchaser could give the supplier a signed exemption certificate and obtain a tax refund. The 1985 letter said the certificate required no exemption number because such numbers did not exist.

STAR adds a later-law alert that H.B. 268, enacted in 2011, required a Comptroller registration number for certain agricultural and timber exemptions beginning January 1, 2012.

Common questions

Were tractor tires exempt? Yes, under the stated exclusive-use rule.

Were tires for unlicensed vehicles included? Yes.

Could manufacturer-designated farm or off-highway tires qualify? Yes.

Is the letter's “no number” statement current? Do not assume so; STAR expressly flags the later registration-number requirement.

Citations and references

• Texas Comptroller Rule 3.296(e)(1) — agricultural repair and replacement parts.
• H.B. 268, 82nd Regular Session (2011) — later registration-number requirement described in STAR's alert.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8510L0680B13

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.

October 30, 1985

Dear ***:

Thank you for your letter of October 25, 1985 concerning the taxability
of tractor tires.

Sales tax Rule 3.296 (e)(1), copy enclosed, specifically states "repair
or replacement parts used exclusively on farm or ranch machinery or
equipment qualify for the exemption. This shall include tractor tires, tires
used on motor vehicles not licensed for highway use, and tires specifically
designated by the manufacturer for farm use or off-highway use only."

You need to sign the enclosed exemption certificate and present it to
your supplier. He can then refund the tax to you. The exemption certificate
does not require a number to be valid. Sales tax exemption numbers do
not exist.

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