The Mississippi State Tax Commission has issued a notice concerning the 1.5% reduced state sales tax rate on purchases of farm tractors, farm implements and parts and labor for agricultural purposes beginning July 1, 2009. A farm tractor is defined as self-propelled equipment which performs no farm function other than to move, draw or furnish power to other implements which may be attached. A farm implement is a complete unit that performs a specialized mechanical function and is identifiable as a specific piece of equipment that is ordinarily and customarily used on a farm. All parts and labor purchased for the maintenance and/or repair of farm tractors and implements are also subject to the reduced 1 % rate of sales tax. If a tractor is purchased for non-agricultural purposes, it is subject to the full 7% rate of sales tax.
Farmers purchasing farm tractors, farm implements and parts and labor for the maintenance and/or repair of farm tractors and farm implements are required to provide copies of their completed and notarized Farmer’s Affidavit to each vendor to be eligible for the reduced rate. The Farmer’s Affidavit expires December 31 of each year, and a new Farmer’s Affidavit should be completed each following year and provided to each vendor. Auction companies selling farm tractors, implements and parts at the reduced 1.5% rate are required to obtain a copy of a notarized Farmer’s Affidavit from the customer to validate charging the reduced rate. (Notice 72-09-006, Mississippi State Tax Commission, September 24, 2009, released October 2009)