Were queen-bee cups, beekeeping supplies, honey, and bees subject to Texas sales tax?

Plain-English summary

A plastic cup used to raise queen bees was tangible personal property and generally taxable. The seller could buy cups for resale using a resale certificate. A beekeeper who sold honey in the regular course of business could buy the cup under an exemption certificate, but a person who raised bees without selling honey owed tax.

The letter treated beekeeper clothing—including gloves, coveralls, hats, and veils—as taxable. Its nonexclusive list of exempt production items included bees, nonreturnable jars and labels, hive foundation, hive tools, chemicals used to treat bee diseases, and a smoker.

Honey was exempt food when sold. Queen bees and other bees were exempt when sold to a person in the business of selling bees or honey, but taxable when sold to someone outside those businesses.

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

Was the queen-bee cup taxable? Generally yes, subject to resale or qualifying agricultural treatment.

Was beekeeper protective clothing exempt? No.

Was honey taxable when sold? No, according to the letter.

Does the 1986 documentation procedure remain current? Do not assume so. STAR expressly warns that later legislation added registration-number requirements effective in 2012.

Citations and references

• H.B. 268, 82nd Regular Session (2011) — later agricultural and timber registration 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/8603L0705G05

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.

March 7, 1986

Dear ***:

I'm certainly glad somebody plans ahead.

I understand you are going to be selling a plastic cup which will be used
in raising queen bees.

The cup is tangible personal property and is taxable. You were correct
in obtaining a sales tax permit. Please give the manufacturer a Resale
Certificate in lieu of tax on "cups" you are going to resell.

If the "cup" is used by a beekeeper who sells honey in the regular course
of business, then the beekeeper may provide an Exemption Certificate in
lieu of tax on the "cup".

If the "cup" is purchased by someone who raises bees but does not sell
the honey, then tax is due on the "cup".

Below are some general guidelines on the agricultural exemption as it
applies to beekeepers.

Items which will be taxable at the time of purchase, and do not qualify
for exemption are any type of clothing used including gloves, coveralls,
hats, and veils.

A partial listing of exempt items would be bees, non-returnable containers
(jars and labels), hive foundation, hive tools, chemicals used to treat bee
diseases, and smoker.

Since honey is a food product, it is exempt from sales and use tax
when sold. Queen bees and other bees would be exempt from sales
tax if sold to a person engaged in the business of selling bees and/or
honey. If sold to a person not engaged in those business the sale
would be taxable.

I am enclosing a copy of our brochure and rule on agricultural exemptions.

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