Exemption Certificates
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) .
Sales and Use Tax Exemption Certificates
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.
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.
Ag/Timber Courtesy Cards
- 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;
