Agricultural and Timber Items

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's office 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.

• farming or ranching for the purpose of raising agricultural products for sale;
• production of fiber crops (cotton, hemp, flax, etc.) for sale;
• timber production (including contract logging);
• feedlot operation;
• commercial fish farm operation;
• beekeeping;
• custom harvesting;
• crop dusting (as defined by 14 Code of Federal Regulations, Section 137.3);
• growing plants for sale in a commercial nursery;
• a veterinary business that makes farm or ranch calls;
• Future Farmers of America or 4-H; or
• horse breeding;
• stud services;
• horse training for horses that will be sold;
• ranches that use horses in their operation; and
• teaching an agricultural vocational course.

• home gardening;
• horse racing, boarding, training or trail rides;
• rodeos, circuses or zoos;
• florists or similar retailers who maintain plants before sale;
• wildlife management and conservation;
• hunting and fishing operations, including aerial hunting;
• predator control;
• wildlife or livestock surveys;
• commercial fishing;
• companion animal (pet) breeding;
• owning horses for pleasure riding, show, or sport;
• training for horses used for sport, pleasure, or show;
• riding stables;
• racing stables that are not horse breeders;
• veterinary clinics;
• commercial arena operations;
• "dude" or resort ranches and lodges; and
• kennels or other animal boarding businesses.

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, 2027.

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.

• Basic information about your business (such as its name, description and address)
• Social Security number (if you do not qualify for a Social Security number, you must apply by mail and include your national identification number and country of origin on the application)
• If your business is registered with the Texas Secretary of State (SOS), your SOS file number (find your file number using our Taxable Entity Search)

If you don’t already have an eSystems/Webfile account with us, you must 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 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 800-531-1441, or call 800-252-5555 to ask for an application to be mailed to you.

Log on to eSystems/Webfile.

• If you have not used eSystems before, select "Sign Up" and follow the instructions to create your user profile.
• If you already have a user profile, enter your User ID and Password and select "Login".

After logging in, take the following steps:

1. From the eSystems menu, select Ag/Timber Exemption under “Other Registration.”
2. Choose “Returning Ag/Timber Account Maintenance” to maintain your current (active) exemption.
3. Enter your 11-digit taxpayer number and Webfile number (if applicable).
4. Select "Request a Duplicate Confirmation Letter and Courtesy Card" from the self-service menu.
5. Confirm or update your mailing address to ensure the correct address is printed on the letter.
6. Choose to print and/or email the letter and courtesy card. If you choose to receive the letter and courtesy card by email, we will send them to the email address listed on your eSystems profile.

Agricultural and timber producers are not exempt entities, and not all purchases they make are exempt from sales or use tax.

There are, however, three ways to purchase items without paying sales or use 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. “Exclusively” means the item must be used 100% of the time in a commercial farm or ranch in the production of agricultural products for sale. An item loses its exemption if it is used for any purpose other than the production of agricultural products for sale.

Always Exempt Purchases – Exemption Certificate Not Required

The following items are always exempt, so you do not have to give retailers an exemption certificate or any other type of documentation:

• seeds and annual plants, the products of which are commonly recognized as food for humans or animals;
• seeds and annual plants that yield products that are sold in the regular course of business;
• cattle, sheep, swine, goats (the products of which are ordinarily food and inspected by the USDA’s Food Safety Inspection Service);
• chickens, turkeys, ducks, geese, guineas, squabs ostriches, rheas or emus (the products of which are ordinarily food and inspected by the USDA’s Food Safety Inspection Service);
• horses, ponies, mules and donkeys;
• exotic animals, as defined by Property Tax Code Section 23.51, Definitions;
• game animals, as described by Parks and Wildlife Code Section 63.001, Game Animals;
• medications, tonics, restoratives or other therapeutic preparations (such as vaccines and drenches) purchased with a prescription from a veterinarian (you must either give the retailer a written prescription from a veterinarian or allow the retailer to receive the prescription directly from the veterinarian);
• water; and
• feed for farm animals, ranch animals and wild game, including oats, hay, chicken scratch, wild bird seed and deer corn.

Exempt Ag/Timber Purchases – Agricultural or Timber Exemption Certificate and Ag/Timber Number Required

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 items directly used to produce agricultural and timber products being raised or harvested for sale. This includes items such as:

• animals raised to sell as food, but not ordinarily considered food or required to be inspected by the USDA’s Food Safety Inspection Service, such as rabbits, deer, llamas and bison;
• animals raised and shown by students and teachers in 4H, FFA and similar agricultural vocational groups;
• fertilizers, fungicides, insecticides, herbicides, defoliants and desiccants used exclusively to produce timber for sale or on a commercial farm or ranch to produce food or other agricultural products for sale;
• machinery and equipment (including repair or component parts) used exclusively on a commercial farm or ranch to produce food or other agricultural products for sale or to build or maintain roads and water supplies;
• machinery and equipment (including repair or component parts) used exclusively to produce timber;
• machinery and equipment used by an original producer for packing and processing agricultural or timber products;
• machinery and equipment exclusively used in an agricultural aircraft operation, as defined by 14 Code of Federal Regulations, Section 137.3;
• tangible personal property incorporated into a structure used for poultry carcass disposal;
• components of irrigation systems used to produce food and other agricultural and timber products for sale;
• seedlings used to produce timber for sale;
• electricity and natural gas used in agricultural or timber operations;
• ice exclusively used by commercial fishing boats in storing aquatic species;
• services performed on exempt tangible personal property identified in this list; and
• telecommunications services used to navigate machinery and equipment exclusively used on a farm or ranch to:
  • build or maintain roads;
  • build or maintain water facilities; or
  • produce agricultural products to be sold in the regular course of business.

The term "machinery and equipment" includes but is not limited to:

• fencing materials and gates used to contain agricultural livestock;
• portable stalls, corral, and gate panels;
• working saddles and tack;
• lunge lines, lunge whips, and lead ropes;
• stocks;
• farrier tools;
• hand tools, hay hooks, twitches, and balling guns;
• feeders, hay racks, water troughs, and buckets;
• tractors, loaders, and implements;
• hot walkers; and
• manure carts.

When you purchase an item that is not always 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.

A retailer may verify an Ag/Timber Number through the Comptroller’s online system, but verification is unnecessary for the retailer to accept an exemption certificate with an Ag/Timber Number.

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’s office.

Any items you buy tax free must be used in an exempt manner. Otherwise, the exemption is lost and you owe tax, penalty, and interest on those items.

A person who has been issued the Ag/Timber Number has certified to the Comptroller’s office that they are engaged in the production of agriculture or timber products for sale. By issuing a retailer an exemption certificate with a valid Ag/Timber Number, a purchaser is certifying the purchases will be used in an exempt manner. The retailer may accept an exemption certificate with an Ag/Timber Number in good faith, provided the item is of a type or quantity that would ordinarily be used in the production of timber products or on a farm or ranch in the production of agricultural products. The properly completed exemption certificate containing a purchaser’s Ag/Timber Number is the retailer’s documentation that a tax-exempt sale was made in good faith.

A retailer must be familiar with the agriculture and timber exemptions available for the items sold by the retailer. A retailer may not claim good faith acceptance of a certificate for purchases of items that clearly do not qualify for the exemption. For example, a retailer should never accept an agricultural or timber exemption certificate for jewelry or furniture because those types of items clearly would not be used in the production of timber products or on a farm or ranch in the production of agricultural products.

A retailer accepting an exemption certificate in good faith must keep records of the sale. A retailer must be able to match the stamped invoices to the purchaser’s exemption certificate. This may be accomplished by the retailer entering the customer’s Ag/Timber Number on each customer-signed invoice or by attaching the invoices to the exemption certificate as indicated on the certificate.

A retailer is required to charge sales or use tax if the person claiming an agricultural or timber exemption does not have a valid Ag/Timber Number.

In determining how to handle refund requests, the retailer must know if the purchaser had a valid Ag/Timber Number at the time the item was purchased. To make this determination, retailers should use the Comptroller’s online verification system.

If the purchaser did not have a valid Ag/Timber Number at the time the purchase was made, the retailer should not refund the sales tax or assign the right to refund to the purchaser.

If the purchaser did have a valid Ag/Timber Number at the time the purchase was made, the retailer may refund the sales tax or give the purchaser an Assignment of Right to Refund if the purchaser provides the Ag/Timber Number to the retailer when making that request.

When a retailer ships or delivers items to an out-of-state location, and the customer does not take possession of the items in Texas, Texas sales tax does not apply. The retailer should simply keep copies of the shipping documents in its records as verification that the items were sent directly out of state.

If a resident from another state or country purchases taxable items in Texas and receives the items here, Texas tax is due. If the purchaser claims an agricultural or timber exemption, the purchaser must provide the appropriate Texas exemption certificate with a valid Texas Ag/Timber Number. Anyone engaged in the production of agricultural or timber products for sale, including non-Texas residents, can apply for an Ag/Timber Number. If the out-of-state customer does not have an Ag/Timber Number, the retailer should collect the sales tax.

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.

Work Animals – Animals used exclusively in one of the following work activities qualify for exemption:

• herding dogs;
• animals raised for their products (such as wool or fur), if harvesting those products is their primary purpose;
• aiding a person with a disability (professionally trained service animals); and
• performing protective services, if the animal has been professionally trained for that specific purpose.

Work animals do not include animals raised, trained or kept as pets or breeding stock or those kept for sport or for show.

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, and rabbits) 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.

Agricultural Exemption – Farm Machines and Farm Trailers

A farm machine or trailer is exempt from motor vehicle sales and use tax if it is used at least 80% of the time in one of the following ways:

• to produce grass, food for people, feed for animals or agricultural products for sale; or
• by an original producer in processing, packing or marketing their own livestock or agricultural products for sale.

Farm machine – a self-propelled motor vehicle specifically adapted for, and primarily used to:

• produce crops or rear livestock, including poultry;
• apply plant food, fertilizer and agricultural chemicals in producing crops; or
• to distribute livestock feed in raising livestock.

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% of the time to transport livestock or property to and from competitions, shows, rodeos or other similar uses does not qualify for exemption.

A horse trailer with sleeping quarters is not exempt, nor is a trailer used for transporting horses to and from competitions or shows.

Timber Exemption – Timber Machines and Timber Trailers

A timber machine or trailer is exempt from motor vehicle sales and use tax if it is used at least 80% of the time in timber operations.

Timber machine – a self-propelled motor vehicle specially adapted to perform a specialized function for use primarily in timber operations, such as land preparation, planting, maintenance or harvesting of commercial timber that will be sold in the regular course of business. An example is a cab chassis with an articulating arm (i.e., grappling arm) for moving logs.

The term “timber machine” does not include:

• crew vehicles;
• field service vehicles; or
• self-propelled motor vehicles specifically designed or adapted to transport timber or timber products, including those designed to transport cargo and adapted with a cargo-loading device.

Timber trailer – a trailer or semitrailer designed for and used primarily in a timber operation.

How to Claim the Exemption on a Qualified Motor Vehicle

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.

Motor Vehicle Rental Tax Exemption

When claiming exemption from motor vehicle gross rental receipts tax when you rent qualifying farm or timber machines and 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.

Gasoline

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.

Learn more about gasoline tax.

Diesel

For state tax purposes diesel fuel is sold in two forms: clear and dyed.

• Clear diesel is subject to the state highway fuel tax and is intended for highway use.
• Dyed diesel is not subject to the state highway fuel tax and is intended for off-highway use.

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), you will need to apply for one of the following:

• Form AP-197, Texas Dyed Diesel Fuel End User Signed Statement Number (PDF) – AG Signed Statement Number – which allows you to purchase up to 25,000 gallons of tax-free dyed diesel per month for exclusive use in agricultural off-highway equipment operated in Texas;
• Form AP-197, Texas Dyed Diesel Fuel End User Signed Statement Number (PDF) – DD Signed Statement Number – which allows you to purchase up to 10,000 gallons of tax-free dyed diesel per month for use in off-highway equipment operated in Texas for non-agricultural purposes such as timber operations; or
• Form AP-133, Dyed Diesel Fuel Bonded User Number (PDF) – Bonded User Number – which allows you to purchase unlimited amounts of tax-free dyed diesel fuel per month for use in off-highway equipment operated in Texas.

Learn more about diesel fuel tax.