If you are a farmer, rancher or timber producer engaged in one of the activities listed below, you qualify for tax exemption on the purchase of certain items used to produce your agricultural and timber products for sale.
All purchasers, including non-Texas residents, must have a valid agricultural and timber registration number (ag/timber number) issued by the Comptroller to claim exemption from Texas tax.
If you do not have a valid ag/timber number, you must pay tax to retailers on your purchases.
Your business type must be listed below to qualify for tax exemption on certain items or for an ag/timber number.
To claim a tax exemption on qualifying items, you must apply for an agricultural and timber registration number (ag/timber number) from the Comptroller. You must include the ag/timber number on the agricultural exemption certificate (PDF) or the timber exemption certificate (PDF) when buying qualifying items.
Ag/timber numbers must be renewed every four years, regardless of when the number was first issued. Renewed and new ag/timber numbers expire Dec. 31, 2019.
You must enter the expiration date on the exemption certificate you give to retailers on your qualifying purchases. If you already have an exemption certificate on file that includes your ag/timber number, you can add the expiration date to the exemption certificate and initial it for the retailer’s records.
If you don’t already have an eSystems/WebFile account with us, you will first register to create a secure online profile. Otherwise, log on as a returning user. The application takes about 10 minutes to complete. No signature is required, and we will issue your ag/timber number at the end of the application process.
We will mail you a confirmation letter in five to seven business days after you complete the online application. In the meantime, you can view and print a copy of your confirmation letter (using Adobe Acrobat Reader) upon completing the registration process, or write down your ag/timber number. You can also look up your registration information at any time.
You can print the application (PDF) and mail the paper version to us. Allow three to four weeks for processing time.
Additionally, you can call our Fax on Demand service at 1-800-531-1441, or call 1-800-252-5555 to ask for an application to be mailed to you.
Once we have processed your application, we’ll send you a confirmation letter with two courtesy cards showing your ag/timber number. These cards are for your convenience. They do not replace the requirement to provide a properly completed exemption certificate, with an active ag/timber number and expiration date, when making tax-exempt purchases.
You can make copies of the courtesy card, and you can authorize a spouse, employee or other person to use the ag/timber number to make purchases in your name.
For example, if three family members operate a farm, one member can apply for an ag/timber number for the farm and all three family members can use it when buying qualifying items. Or, a corporate agricultural or timber operation with multiple employees can obtain one card and number that can be used by all authorized employees for qualifying purchases.
You are responsible for properly using your ag/timber number, and you can be held liable for its misuse.
Agricultural and timber producers are not exempt entities, and not all purchases they make are exempt from sales tax.
There are, however, three ways to purchase items without paying sales tax. Some items are exempt by law, some are exempt when used exclusively for ag/timber purposes and other items qualify for a standard sales tax exemption.
The following items are always exempt, so you do not have to give retailers an exemption certificate or any other type of documentation:
You must give the retailer a properly completed agricultural or timber exemption certificate showing a current agricultural and timber registration number (ag/timber number) when purchasing these items:
Some animals and their feed do not qualify for the ag/timber exemption, but do qualify for the standard sales and use tax exemption. You must give the retailer a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF) when purchasing them. The certificate must specifically explain the exempt purpose for which the animal or feed will be used. You do not need an ag/timber number to buy them.
Work Animals – Animals used exclusively in one of the following work activities qualify for exemption:
Work animals do not include animals raised, trained or kept as pets or breeding stock or those kept for sport or for show. For example, tax is due on hunting dogs or other animals a game hunting operation purchases and on exotic animals a zoo or circus purchases.
Animal Feed – Feed for work animals qualifies for exemption. Feed for animals being held for sale in the regular course of business (including dogs, cats, rabbits and exotic animals) also qualifies for exemption.
To qualify for exemption, the sales and use tax exemption certificate must clearly state the feed is for work animals, animals to be sold in the regular course of business or for breeding stock for animals that will be sold.
Pet food is taxable. Pet food prescribed by a veterinarian can be purchased tax free without a sales and use tax exemption certificate.
Farm and timber machines, trailers and semitrailers used primarily for farming, ranching and timber operations (including machines and trailers used primarily in poultry operations and on feedlots) qualify for exemption from motor vehicle tax.
A farm machine or trailer is exempt from motor vehicle sales and use tax if it is used at least 80 percent of the time in one of the following ways:
Farm machine – a self-propelled motor vehicle specifically adapted for, and primarily used to:
A self-propelled motor vehicle designed or adapted to primarily transport people or agricultural products is not a farm machine.
Farm trailer – a trailer or semitrailer designed for and used primarily on a farm or ranch.
The term “farm trailer” does not include a motor vehicle designed for sleeping, dressing, lounging, restroom use or meal preparation, even if the vehicle is used to transport livestock or agricultural products.
A farm trailer used more than 20 percent of the time to transport livestock or property to and from competitions, shows, rodeos or other similar uses does not qualify for exemption.
Pick-up truck – a pick-up truck is taxable, even if it is registered with farm plates.
A timber machine or trailer is exempt from motor vehicle sales and use tax if it is used at least 80 percent of the time in timber operations.
Timber machine – a self-propelled motor vehicle specifically adapted to perform a specialized function for use primarily in timber operations, such as land preparation, cultivating, maintaining and harvesting commercial timber.
The term “timber machine” does not include:
Timber trailer – a trailer or semitrailer designed for and used primarily in a timber operation.
To claim exemption from motor vehicle sales and use tax on the purchase of a qualified farm or timber machine or trailer, you must provide the dealer a properly completed Form 14-319, Texas Motor Vehicle Exemption Certificate for Agricultural and Timber Operations (PDF).
The exemption must also be claimed at the time of titling or registration with the local County Tax Assessor-Collector by entering your current ag/timber number on Form 130-U, Application for Texas Title.
Farm Plates – For information on registering (or renewing registration of) a motor vehicle with farm plates, contact your local county tax assessor-collector or the Texas Department of Motor Vehicles at TxDMV.gov.
When claiming exemption from motor vehicle gross rental receipts tax when you rent qualifying farm or timber machines trailers, you must enter your ag/timber number and expiration date on Form 14-305, Motor Vehicle Rental Tax Exemption Certificate (PDF).
Motor fuel is taxed when it is removed from the terminal rack. The tax is included in the price you paid at the pump. You may qualify for a refund on your gasoline purchases, and you may be able to purchase dyed diesel fuel tax free.
You cannot use your agricultural and timber registration number to purchase motor fuel tax free.
You cannot purchase gasoline tax free; however, you can apply for a refund (PDF) of tax paid on gasoline used in off-highway equipment such as tractors, mowers and generators.
For state tax purposes diesel fuel is sold in two forms: clear and dyed.
All purchases of clear diesel fuel are taxable, including clear diesel fuel used in off-highway equipment such as tractors and combines. There is no tax exemption or refund when you purchase clear diesel fuel.
Dyed diesel fuel used to power non-highway equipment, such as tractors or combines, can be purchased tax free directly from your fuel supplier. You are not required to have a state fuels tax license when your supplier pumps the dyed diesel directly into the fuel tank of your off-highway equipment. The fuel supplier must maintain the required fuel records and documentation to verify the purchase.
If you purchase dyed diesel in bulk (fuel supplier delivers dyed diesel into your storage tank), then you will need to apply for one of the following:
When you purchase an item that is not exempt from tax by law, you must give the seller an exemption certificate to purchase the item tax free. The type of exemption certificate depends on the type of item you are purchasing and how it will be used.
Retailers are not required to accept an exemption certificate. If they choose not to accept an exemption certificate from you on a qualifying item, you must pay the tax and then request a refund of the tax paid from the Comptroller.
Any items you buy tax free must be used in an exempt manner. Otherwise, the exemption will be lost and you will have to pay tax, penalty and interest on those items.
An agricultural or timber exemption certificate is required when you claim a sales tax exemption on the purchase of items directly used to produce agricultural and timber products being raised or harvested for sale.
You must give the retailer a properly completed agricultural or timber exemption certificate that includes your current ag/timber number and expiration date when purchasing qualifying items.
Agricultural – For purchases of items (PDF) used exclusively on a commercial farm or ranch to produce food or other agricultural products for sale, you must give the retailer a Form 01-924, Texas Agricultural Sales and Use Tax Exemption Certificate (PDF).
Timber – For purchases of items (PDF) used exclusively to produce timber products for sale, you must give the retailer a Form 01-925, Texas Timber Operations Sales and Use Tax Exemption Certificate (PDF).
Some animals and their feed do not qualify for the ag/timber exemption, but do qualify for the standard sales and use tax exemption. You must give the retailer a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF) when making these purchases. The certificate must specifically explain the exempt purpose for which the animal or feed will be used. You do not need an ag/timber number to buy these items.
You cannot use Form 01-339, Texas Sales and Use Tax Exemption Certificate to claim an agricultural or timber exemption.
When you buy items that qualify for tax exemption, you can give one exemption certificate to the retailer at the time of your first qualifying purchase. The certificate will cover that purchase and all future qualifying purchases. The retailer must keep that “blanket” exemption certificate on file.
When you purchase exempt items later, the retailer must stamp, write or print a statement on the invoice that says the items will be used for exempt purposes. For exempt ag/timber purchases, the stamped invoice must also include your ag/timber number, expiration date and signature.
All blanket exemption certificates given to retailers for qualifying ag/timber items must be updated every four years with your current ag/timber number expiration date.
Farm and timber machines, trailers and semitrailers used primarily for farming, ranching and timber operations, including machines and trailers used primarily in poultry operations and on feedlots, qualify for exemption from motor vehicle tax.
Motor Vehicle Tax Exemption – To claim exemption from motor vehicle sales and use tax on the purchase of a qualified farm/timber machine, trailer or semitrailer, you must give the dealer a properly completed Form 14-319, Texas Motor Vehicle Exemption Certificate for Agricultural or Timber Operations (PDF).
The exemption must also be claimed when you title or register the vehicle with your local county tax assessor-collector. Use the Form 130-U, Texas Application for Title, and enter your current ag/timber number on that form.
Motor Vehicle Rental Tax Exemption – To claim exemption from gross rental receipts on the rental of qualifying farm/timber machines and qualifying farm/timber trailers, enter your agricultural and timber registration number (ag/timber number) and expiration date on the Form 14-305, Motor Vehicle Rental Tax Exemption Certificate (PDF) you give to the motor vehicle rental dealer.
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