Is dog food, fertilizer, and other feed-store merchandise taxable in Texas, and when is feed for dogs and cats exempt from sales tax?

Subject

Dog Food — Dogs Held For Breeding Purposes

Plain-English summary

A Texas feed and grain store that sells to farmers, ranchers, and everyday (non-commercial) customers asked the Comptroller to sort out which of its 25-plus product lines are taxable and which are exempt. The Comptroller answered item by item, but the pattern is the same throughout: Texas exempts feed, seed, fertilizer, and related supplies only when they are used exclusively on a farm or ranch for agricultural production, fed to animals held for sale in the ordinary course of business, fed to wildlife, or (for feed specifically) fed to a breeding animal whose offspring will be sold. Everything else — pets, show animals, sport or rodeo animals, race horses (except their feed), and home gardens or lawns — is taxable.

The ruling's title question gets a direct answer: dog or cat food is taxable when it's simply pet food, but it becomes exempt in two situations — (1) it's fed to an animal raised for slaughter or otherwise held for sale, or (2) it's fed to a dog or cat kept for breeding purposes where the offspring (puppies or kittens) are held for sale. The Comptroller also confirmed the seller does not have to police how a customer actually uses an item; it just needs a properly completed exemption certificate on file. Garden seed, wood shavings/rice hulls used as litter, veterinary hardware (needles, syringes), feed for laying chickens, and items for 4-H/FFA show animals are called out as not taxable, while fertilizer and pesticides for home lawns/gardens, race-horse supplies (other than feed), and tack or equipment for rodeo, show, or non-farm horses are taxable.

What this means for you

Feed store and farm/ranch supply retailers

Whether an item is taxable often depends on how the customer will use it, not what the item is. You are not required to verify actual use — accepting a properly completed exemption certificate in good faith satisfies your obligations under Rule 3.296(d). Keep certificates on file; the sales tax statute of limitations is four years, though the ruling notes blanket exemption certificates should be kept indefinitely.

Farmers, ranchers, and breeders

Items like tack, ropes, feeders, and waterers are exempt only if used exclusively on a farm or ranch — the same bridle is exempt for a working cattle horse but taxable for a show or rodeo horse. If you breed dogs, cats, or other animals and sell the offspring, feed for the breeding animals is exempt; feed for animals you simply keep as pets is not.

Accountants and tax professionals

This ruling is a useful reference for applying 34 Tex. Admin. Code § 3.296 across a wide range of feed-store products: garden seed (exempt), bulk fertilizer for crops (exempt) vs. lawn/garden fertilizer (taxable), pesticides used on livestock (exempt) vs. in a home garden (taxable), and feed generally (exempt for farm/ranch animals, sale animals, wildlife, or qualifying breeding animals; taxable for pets, show, or sport animals). Note the ruling predates the 2012 registration-number requirement flagged in the alert banner — confirm current registration rules before relying on this for agricultural/timber exemption certificates today.

Common questions

Q: Is dog or cat food ever exempt from Texas sales tax?
A: Yes, in two situations: when it's fed to an animal raised for slaughter or otherwise held for sale in the ordinary course of business, or when it's fed to a breeding animal whose offspring are held for sale. Feed for ordinary pets, and for animals kept for sport or show, is taxable.

Q: Does the feed store have to verify that a customer actually uses an exempt item on a farm or ranch?
A: No. Per Rule 3.296(d), the seller can rely on a properly completed exemption certificate and is not responsible for confirming the customer's actual use.

Q: Is fertilizer always exempt for farmers?
A: Fertilizer purchased in bulk is exempt if used exclusively on a farm or ranch to produce food for human consumption. Fertilizer for lawns or home gardens is taxable.

Q: Are tack, ropes, and similar equipment exempt for horses used in rodeos or shows?
A: No. Items like ropes, tack, and hardware are exempt only if used exclusively on a farm or ranch — for example, a bridle for a horse used to work cattle is exempt, but a bridle for a rodeo or show horse is taxable.

Q: Is feed for race horses exempt?
A: No, with one exception: feed itself is exempt, but all other items purchased for race horses (equipment, supplies, etc.) are taxable.

Citations and references

• 34 Tex. Admin. Code § 3.296 (Agriculture, Animal Life, Feed, Seed, Plants, and Fertilizer) — cited throughout for garden seed, fertilizer, litter materials, veterinary hardware, feed for farm/ranch and sale/breeding animals, exemption certificate procedures, and horse health products.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9208414L

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.

August 28, 1992

Dear **:

Thank you for your letter of July 14, 1992, concerning the taxability of items
sold through a feed and grain store. The store makes sales to farmers,
ranchers, and non-commercial users. You asked that we address the taxability of
the following items.

(1) Garden seed:

Response: Not taxable. Please refer to Section (a)(3) of Rule 3.296,
Agriculture, Animal Life, Feed, Seed, Plants, and Fertilizer.

(2) Fertilizer and other products used in gardens: (e.g. A farmer buys a large
amount of fertilizer for his corn crop.)

Response: Fertilizer purchased in bulk amounts is exempt if used exclusively on
a farm or ranch for the production of food for human consumption. Fertilizer
purchased for lawns or home gardens is taxable. Please refer to Section (a)(4)
of Rule 3.296.

(3) Is the seller responsible for finding out if products are actually used in
a garden, farm, lawn, or ranch?

Response: No. Please refer to Section (d) of Rule 3.296.

(4) Wood shavings or rice hulls when used for litter:

Response: Not taxable. These items are used as desiccants. Please refer to
Section (a)(4) of Rule 3.296.

(5) Hardware such as needles, syringes, bolus guns, etc:

Response: Not taxable. Please refer to Section (a)(5)(A) of Rule 3.296.

(6) Garden products such as malathion dust if used on cattle:

Response: Malathion is an insecticide and as such qualifies for exemption
provided it is used in the exempt manner described in Section (a)(4) of Rule
3.296. Use on cattle would qualify for exemption, but use in a home garden
would not.

(7) Ropes and lariats, hotshots, whips, and canes:

(8) Feeders and waters:

(9) Horse tack items:

(10) Cattle tack items:

(11) Sheep tack items:

Response to Questions 7-11: These items qualify for exemption only if used
exclusively on a farm or ranch. They do not qualify for exemption if used in
any other manner. For example, a bridle purchased for a horse used to work
cattle is exempt while a bridle for a rodeo or show horse is not.

(12) Items bought for FFA or 4-H show animals:

Response: Not taxable.

(13) Rodenticide and ant bait:

Response: Not taxable provided it is used exclusively on a farm or ranch.
Taxable if used in any other manner.

(14) Items bought for race horses:

Response: All items are taxable with the exception of feed. Please refer to
Section (a)(2)(A).

(15) Horse shoes, nails, and rasps to farmers:

Response: These items are taxable unless the horse is used exclusively on a
farm or ranch.

(16) Dog food if fed to animals raised for slaughter, or cattle feed if fed to
a pet. If these two are different, what are the differences?

Response: Any type of feed consumed by farm or ranch animals, animals held for
sale in the normal course of business, and wildlife is exempt. Feed for pets or
animals for sport or show is taxable. Please refer to Section (a)(2) of Rule
3.296.

(17) Incubators:

Response: The incubator would qualify for exemption if used exclusively on a
farm or ranch in the production of food for human consumption or other
agricultural products to be sold in the regular course of business.

(18) Feed fed to laying chickens regardless of the number of chickens owned.

Response: Not taxable.

(19) Is dog or cat food ever exempt?

Response: Yes. See the response to Question 16. Also, feed is exempt if the
animal is held for breeding purposes and the offspring are held for sale.

(20) Anything fed to wild game:

Response: Not taxable.

(21) Horse health products:

Response: Please refer to Section (e) of Rule 3.296 for a list of exempt items.

(22) Catfish food:

Response: The catfish food would be exempt if the fish are held for sale in the
regular course of business or are food for human consumption. Please refer to
Section (a)(2) of Rule 3.296.

(23) Rabbits and catfish sold commercially:

Response: Not taxable if for human consumption or if sold in the regular course
of business. Rabbits sold as pets are taxable.

(24) Products for pecan or fruit trees:

Response: Products for pecan or fruit trees must meet the same qualifications
described in Section (a)(4) and (5) of Rule 3.296, in order to qualify for
exemption. Also, refer to Section (c) of Rule 3.296.

(25) Feed for farm and ranch animals is specifically exempt.

(a) What exactly are farm and ranch animals?

(b) Do rabbits, catfish, and deer fall under this category?

Response: Please refer to Section (a) of Rule 3.296.

Additional questions:

(1) If an item is determined to be exempt, does the customer need to sign an
exemption certificate?

(2) Does the customer need to sign the form every time he makes a purchase?

(3) If the customer needs to sign the form every time he makes a purchase, can
a disclaimer be put on the invoices and signed.

(4) If a disclaimer can be put in, do the stores still need to keep a separate
file of signed forms for each customer that bought an exempt item?

Response for Questions 1-4: Please refer to Section (d) of Rule 3.296, for the
procedure on accepting exemption certificates.

(5) How long do we need to keep this file?

Response: The statute of limitations is four years for sales tax purposes.
However, blanket exemption certificates should be kept indefinitely.

(6) What actions do any of the state agencies take if my competition does not
follow these same rules.

Response: The Comptroller routinely audits taxpayers to ensure compliance of
tax laws. If a taxpayer is not in compliance, a tax liability is set up to be
paid with penalty and interest.

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, ext. 50037 or the regular Austin number is 512-475-0037.
You also may write to Tax Administration Division.

Sincerely,

Lindey Osborne
Tax Administration Division