Ezel / Tax Rulings / TX
TX 8708L0827A01 Sales and/or Use Tax (State,Local,MTA) 1987-08-07

Did a computer used to track registration numbers and pedigrees for cattle raised for sale qualify for Texas's agricultural sales-tax exemption?

Short answer: No. A computer used for recordkeeping was not equipment used in the direct production, processing, or marketing of an agricultural product.

Apply this to your situation

This page answers the general question as of 1987. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1987
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 a taxpayer-specific August 1987 Texas Comptroller letter about an agricultural exemption for a cattle-recordkeeping computer. It says the opinion may change if the facts differ and relies on an enclosed December 1985 hearing decision that is not reproduced in STAR. The answer is historical; verify current agricultural exemption law. STAR documents may no longer represent current policy even when not marked superseded. Identities 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

CORP ABC bought a computer to maintain registration numbers and pedigrees for registered cattle raised for sale to other breeders.

The Comptroller said computers used for recordkeeping did not qualify for the agricultural sales-tax exemption. An enclosed December 1985 hearing decision had likewise concluded that a recordkeeping computer was not equipment used in the direct production, processing, or marketing of an agricultural product.

What this means for you

The historical ruling distinguished business records from direct agricultural activity. Supporting cattle sales through pedigree and registration records was not enough to make the computer direct-production, processing, or marketing equipment.

Common questions

What records did the computer maintain? Registration numbers and pedigrees of registered cattle.

Did it qualify for agricultural exemption? No.

Why not? Its function was recordkeeping rather than direct production, processing, or marketing.

Citations and references

  • The letter cites an enclosed December 1985 hearing decision but gives no hearing number, and STAR does not reproduce the enclosure.

Source

Original ruling text

August 7, 1987

Dear ***:

Thank you for your recent letter concerning an agricultural exemption for
a computer purchased by CORP ABC.

According to your letter, the computer was purchased to keep up with the
registration numbers and pedigrees of registered cattle raised for sale
to other breeders. Computers used for record keeping purposes do not
qualify for exemption from sales tax.

I have enclosed a copy of a hearing decision issued in December 1985. The
administrative law judge ruled that a computer used for record keeping
did not qualify for exemption as equipment used in the direct production,
processing or marketing of an agricultural product.

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 Policy Division.

Sincerely,

Julie Pesl
Tax Policy Division

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