Are vitamin and mineral supplements for horses exempt from Texas sales tax?

Subject

Vitamin And Mineral Supplements For Horses Are Sales Tax Exempt

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/9310L1262B05

Plain-English Summary

A taxpayer asked the Comptroller about the sales tax treatment of vitamin and mineral supplements sold for horses. The Comptroller's response states that, based on research, vitamin and mineral supplements for horses are exempt. The letter adds a caveat: unless the item is clearly for horses only, the seller should obtain an exemption certificate from the customer.

The same letter also addresses seed inoculants, stating they are exempt if used exclusively on a farm or ranch in the production of food for human consumption, feed for any form of animal life, or other agricultural products held for sale. The letter notes these products would not normally be used in a home garden, but would be taxable if used that way. A signed exemption certificate stating the product would be used exclusively for agriculture would be sufficient to relieve the seller of any sales tax liability.

The letter closes with the standard caveat that the opinion is rendered based on the facts submitted, and that other facts, though similar, may yield different results.

What This Means For You

If you sell vitamin and mineral supplements marketed for horses: The letter states these products are exempt from sales tax. If the product isn't clearly marketed for horses only, get a signed exemption certificate from the customer to document the exempt, agricultural use and protect yourself from sales tax liability on the sale.

If you sell seed inoculants: These are exempt only when used exclusively on a farm or ranch to produce food for human consumption, feed for animal life, or other agricultural products held for sale. If a customer might use the product in a home garden instead, the sale is taxable unless the customer signs an exemption certificate affirming exclusive agricultural use.

Documentation is the key protection: In both cases, the letter emphasizes that a signed exemption certificate from the customer, stating the exempt agricultural use, is what relieves the seller of sales tax liability — particularly when the product's use isn't obvious from the product itself.

Q&A

Q: Are vitamin and mineral supplements for horses subject to Texas sales tax?
A: No. The letter states that, based on the Comptroller's research, vitamin and mineral supplements for horses are exempt.

Q: What should a seller do if a vitamin/mineral product isn't clearly marketed for horses only?
A: The letter advises obtaining an exemption certificate from the customer in that situation.

Q: Are seed inoculants exempt from sales tax?
A: Yes, but only if used exclusively on a farm or ranch in the production of food for human consumption, feed for any form of animal life, or other agricultural products held for sale, per the letter.

Q: Are seed inoculants taxable if used in a home garden?
A: Yes. The letter states the products would not normally be used in a home garden, but would be taxable if so used.

Q: What documentation relieves a seller of sales tax liability on these agricultural products?
A: A signed exemption certificate stating the product would be used exclusively for agriculture, according to the letter.

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.

October 6, 1993

Dear ****:

Based on my research, vitamin and mineral supplements for horses are
exempt. Unless the item is clearly for horses only, then you should
obtain an exemption certificate from your customer.

Seed Innoculants are exempt if used exclusively on a farm or ranch in
the production of food for human consumption, feed for any form of
animal life or other agricultural products held for sale. The products
would not normally be used in a home garden, but would be taxable if
so used. A signed exemption certificate stating that the product would
be used exclusively for agriculture would be sufficient to relieve
***** of any sales tax liability.

This opinion is rendered based on the facts you submitted. Other
facts, though similar, may yield different results.

If you have questions or need more information, please call or write.
You may reach me by calling toll free, (800) 531 -5441 (ext. 34680).
My direct line number is (512) 463 -4680. The number for FAX
transmissions is (512) 475-0900. You may write to me in care of Tax
Administration Division.

Sincerely,

Al Van Allen
Tax Administration Division

NOTE: Previous Accession Number 9308102L.7 and/or 9308102L