General Assembly Passes Modernization of Agriculture Sales Tax

May 03, 2022 at 10:34 am by WGNS

The Tennessee Farm Bureau Federation enthusiastically applauds the Tennessee General Assembly for unanimously passing the Modernization of Agriculture Sales Tax (SB905 Stevens/HB1405 Halford).

As amended, this legislation will provide much needed clarity and certainty on the tax status for both farmers and the businesses from which farmers purchase input items. As a result, qualified farmers will be able to purchase some input items that have previously been denied an exemption. The new exemption language more closely aligns to the process used in manufacturing and eliminates wording that previously resulted in unfavorable agency interpretations. “We are extremely grateful to the members of the Tennessee General Assembly, especially the sponsors of this bill, for their support of Tennessee farmers,” said Tennessee Farm Bureau Federation President Eric Mayberry. “This was a top priority issue for our organization. For many years, the confusion, inconsistent taxation and resulting uncertainty has been frustrating to farmers, retailers and the Tennessee Department of Revenue. Farmers can now focus on what they do best – providing food, fiber and fuel for all of us.”

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Going forward, all items used to cultivate, produce, harvest, process, market and transport crops will be exempt from sales tax for qualified farmers with the Tennessee Department of Revenue. Several items farmers believed should be exempt were not covered under the previous law and will now be exempt from sales tax for qualified farmers. To use this exemption, individuals must still apply and receive a qualified farmer exemption card from the Tennessee Department of Revenue. Farmers who currently have an agriculture exemption certificate will not need to reapply. The Department of Revenue reissues agricultural certificates of exemption every four years without action by the farmer.

Automobiles, trucks, household appliances, and gasoline or diesel used in vehicles operated upon the public highways ARE NOT exempt today and the status does not change with this bill.


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