Ezel / Tax Rulings / TX
TX 9105L1109F04 Sales and/or Use Tax (State,Local,MTA) 1991-05-20

Did Texas's agricultural exemption apply to machinery and equipment used by an original-producer shrimp farm?

Short answer: Yes under the 1991 letter. STAR warns that a 2011 law later required a Comptroller registration number for certain agricultural and timber exemptions.

Apply this to your situation

This page answers the general question as of 1991. Ezel answers yours, under current Texas tax law, with citations.

Currency note: this ruling is from 1991
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 Texas Comptroller of Public Accounts letter published on the State Tax Automated Research (STAR) system. Letters on STAR can be the basis of a detrimental reliance claim only for the taxpayer to whom the letter was directly issued (see 34 Tex. Admin. Code Rules 3.1 and 3.10); documents on STAR may no longer represent current policy even if not marked superseded. Taxpayer-identifying details are redacted. This summary is informational only and is not legal or tax advice. Consult a licensed Texas tax professional about your specific situation.
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

A shrimp-farm operator asked about machinery and equipment used in the farming operation.

The Comptroller said the exemptions in Rule 3.296 applied because the shrimp farm was the original producer.

STAR now places an alert above the letter saying H.B. 268 from the 2011 legislative session may affect the document. According to the alert, beginning January 1, 2012, people claiming exemptions for certain agricultural and timber products had to apply for and provide a Comptroller-issued registration number.

What this means for you

The 1991 holding treated the original-producer shrimp farm as an agricultural operation, but the official STAR alert says later registration requirements may affect use of the exemption.

Common questions

What property was at issue? Machinery and equipment used in a shrimp-farm operation.

Why did the exemption apply? The farm was the original producer.

Does STAR flag later law? Yes.

When did the stated registration requirement take effect? January 1, 2012.

Citations and references

  • 34 Tex. Admin. Code Rule 3.296 — agriculture exemption applied in the 1991 letter
  • H.B. 268, 82nd Regular Legislative Session (2011) — later amendment identified 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.

May 20, 1991

Dear **:

Thank you for your recent letter regarding the taxability of
machinery and equipment used in a shrimp farm operation.

Because your shrimp farm is the original producer, the exemptions
provided in Rule 3.296 on agriculture will apply to the operation.

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, you may call
me toll free at 1-800-531-5441, extension 5-0300. The regular
number is 512/463-4600, or write Tax Administration Division.

Sincerely,

Bettie U. Peterson
Tax Administration Division

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