Was a metal building used seasonally for kidding and shearing Angora goats exempt as agricultural equipment?

Plain-English summary

The proposed insulated metal building was used for Angora goats to kid from January through March and for shearing in August and September. Its doors and clearance also allowed a dump truck and front-end loader inside for cleaning.

The Comptroller denied the exemption. To qualify, the building had to essentially become agricultural equipment used solely for kidding and shearing and had to be designed so it could not economically be used for another purpose. If the requester could store the truck or loader there outside the kidding and shearing periods, the building was a nonexempt general-purpose building under Rule 3.296(g)(8)(C).

STAR later added an alert stating that House Bill 268 required people claiming certain agricultural and timber exemptions to obtain and provide a Comptroller registration number beginning January 1, 2012.

What this means for you

Agricultural use alone did not make the structure exempt. The design and economic inability to use the building for other purposes were essential to the equipment classification described in this letter.

Common questions

Was the building exempt because goats were born and sheared there? No. What would have supported exemption? A specialized design making the structure usable solely for those activities and uneconomic for other purposes. Why did truck or loader storage matter? It showed a practical general-purpose use.

Citations and references

• 34 Tex. Admin. Code Rule 3.296(g)(8)(C)
• House Bill 268, 82nd Legislature, Regular Session (2011), as described in STAR's later 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/9201L1144E05

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.

January 3, 1992

Dear **:

Thank you for your fax transmission of December 12, 1991, regarding the
taxability of a metal building used for kidding and shearing Angora goats.

As I understand it, this is a 50' X 100' X 16', fully insulated, metal building
with two walk in doors and two overhead insulated doors. The building is built
with enough clearance to use a dump truck and front end loader to clean the
interior. The purpose of the building is for Angora nanny goats to kid January
through March and then the goats are sheared in the building in August and
September.

As described, this building does not qualify for exemption of the sales tax.
In order to be exempt, the building must essentially become a piece of
equipment used solely for the purpose of kidding and shearing the goats. The
building must be specifically designed and built in a manner that the structure
cannot be economically used for any other purpose. For example, if you could
store the dump truck or front end loader in the building when it is not being
used for shearing or kidding, then the building is considered a nonexempt
general purpose building. Please refer to Section (g)(8)(C) of Rule 3.296
Agriculture, Animal Life, Feed, Seed, Plants, and Fertilizer.

This opinion is based on the facts presented. If there are any additional or
different facts, the opinion may change.

If you have any questions or need additional information, you may call toll
free 1-800-252-5555 or the regular Austin number is 512-463-4600. You may also
write to Tax Administration Division.

Sincerely,

Lindey Osborne
Tax Administration Division