The Tennessee Department of Revenue has released guidance on the application of the state’s revised farm equipment sales and use tax exemption that will come into effect on January 1, 2023. The new regulations replaced the prior list of specifically enumerated items qualified for exemption, and exempts building materials, fencing material, warranties, and most other items of tangible personal property used primarily in agricultural from tax. Automobiles, trucks, household appliances, and fuel for vehicles operated on public highways do not qualify for the exemption.
The state included key definitions to help taxpayers comply with the new law:
To obtain the exemption for qualifying purchases, farms must present their vendor with a copy of their Tennessee Agricultural Sales and Use Tax Certificate of Exemption or Streamlined Sales Tax Certificate of Exemption. (Tennessee Sales and Use Tax Notice #22-14, November 2022)