Ezel / Tax Rulings / TX
TX 8512L0687F06 Sales and/or Use Tax (State,Local,MTA) 1985-12-13

Did a fish farm raising fish for sale qualify for Texas's agricultural sales-tax exemption?

Short answer: Yes. The exemption covered the fish and qualifying food, medication, and machinery or equipment used exclusively to raise them, subject to documentation.

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This page answers the general question as of 1985. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1985
Subsequent statutory amendments, regulation changes, court decisions, or later rulings may have changed the analysis. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, rate, or position mentioned here.
Disclaimer: This is an official 1985 Texas Comptroller taxpayer-response letter applying then-current Rule 3.296 to a fish farm raising fish for sale. STAR warns that H.B. 268 (2011) later required a Comptroller-issued registration number for certain agricultural and timber exemptions beginning January 1, 2012. The letter expressly says different facts could change the opinion. Current agricultural, aquaculture, feed, medication, equipment, exclusive-use, registration, and certificate rules may differ, and STAR documents may no longer represent current policy even when not marked superseded. Letters on STAR can support detrimental reliance only for the taxpayer to whom the letter was directly issued under 34 Tex. Admin. Code Rules 3.1 and 3.10. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official state tax ruling. The original ruling (linked on this page) is the authoritative source for any reliance.

Plain-English summary

Rule 3.296 exempted animal life whose products ordinarily constituted food for human consumption. The Comptroller therefore said a fish farm raising fish for sale qualified for the agricultural exemption.

The exemption included food, medication, and machinery or equipment used exclusively on the fish farm to raise the fish. A purchaser claiming the exemption had to give the seller a properly completed exemption certificate.

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

Common questions

Did the fish farm qualify for the agricultural exemption? Yes, because it raised fish for sale.

Which inputs were included? Food, medication, and machinery or equipment used exclusively to raise the fish.

Was documentation required? Yes, a properly completed exemption certificate under the letter's rule.

Should the 1985 procedure be assumed current? No. STAR expressly identifies a later registration-number requirement.

Citations and references

  • Texas Comptroller Rule 3.296 — agricultural exemption applied to the fish farm.
  • H.B. 268, 82nd Regular Session (2011) — later registration-number requirement described in STAR's alert.

Source

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.

December 13, 1985

Dear **:

Thank you for your letter of December 2, 1985 concerning an agricultural
exemption for a fish farm.

Enclosed is sales tax Rule 3.296 which exempts any form of animal life of any
kind the products of which ordinarily constitute food for human consumption. A
fish farm raising fish for sale qualifies for the agricultural exemption. The
exemption includes the food, medication, and machinery/equipment exclusively
used on the fish farm in the raising of the fish .

When purchasing an item which qualifies for exemption you must furnish the
seller a properly completed exemption certificate. Refer to section (e) of the
enclosed rule.

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 me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Administration Division.

Sincerely,

Dot Burchard
Tax Policy Section
Tax Administration Division

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