Ga. Comp. R. & Regs. R. 560-12-2-.03 - Agriculture Exemptions
(1)
Purpose. This Rule addresses the sales and use tax exemptions in
O.C.G.A. §
48-8-3.3 for Agricultural Production Inputs, Agricultural Machinery and Equipment, and
Energy Used in Agriculture.
(2)
Definitions. For purposes of this Rule only:
(a) "Agricultural Machinery and Equipment"
means:
1. Machinery and Equipment used in
Agricultural Operations, examples of which are provided in paragraph (5);
or
2. Machinery or Equipment
expressly included in O.C.G.A. §
48-8-3.3(a)(1)(B):
(i) Farm tractors and attachments to the
tractors used in Agricultural Operations;
(ii) Any off-road vehicle used in
Agricultural Operations;
(iii)
Self-propelled fertilizer or chemical application Equipment sold to persons
engaged primarily in producing Agricultural Products for sale and that are used
exclusively in tilling, planting, cultivating, and harvesting Agricultural
Products;
(iv) Devices and
containers used in the transport and shipment of Agricultural
Products;
(v) Aircraft exclusively
used for spraying agricultural crops;
(vi) Pecan sprayers, pecan shakers, and other
Equipment used in harvesting pecans sold to persons engaged in the growing,
harvesting, and production of pecans;
(vii) Off-road Equipment and related
attachments that are sold to or used by persons engaged primarily in the
growing or harvesting of timber and that are used exclusively in site
preparation, planting, cultivating, or harvesting timber;
(viii) Grain bins and attachments to grain
bins that are used in Agricultural Operations regardless of whether such grain
bins or attachments become incorporated into Real Property;
(ix) Trailers used to transport Agricultural
Products;
(x) All-terrain vehicles
and multi-passenger rough-terrain vehicles that are used in Agricultural
Operations; and
(xi) Any Repair,
Replacement, or Component Parts installed on Agricultural Machinery and
Equipment.
(b)
"Agricultural Operations" is used synonymously with the term "Agricultural
Purposes."
1. Except as otherwise provided in
this Rule,"Agricultural Operations" means the following activities:
(i) Raising, growing, harvesting, or storing
of crops, including but not limited to soil preparation and crop production
services, such as plowing, fertilizing, seed bed preparation, planting,
cultivating, and crop protecting services;
(ii) Feeding, breeding, or managing
Livestock, equine, or poultry;
(iii) Producing or storing feed for use in
the production of Livestock, including but not limited to cattle, calves,
swine, hogs, goats, sheep, equine, and rabbits, or for use in the production of
poultry, including but not limited to chickens, hens, ratites, and
turkeys;
(iv) Producing plants,
trees, fowl, equine, or other Animals;
(v) Producing aquacultural, horticultural,
viticultural, silvicultural, grass sod, dairy, Livestock, poultry, egg, and
apiarian products;
(vi) Processing
poultry;
(vii) Post-harvest
services on crops with the intent of preparing them for market or further
processing, including but not limited to crop cleaning, drying, shelling,
fumigating, curing, sorting, grading, packing, ginning, canning, pickling and
cooling.
(viii) Slaughtering
poultry and other Animals; and
(ix)
Manufacturing dairy products.
2. "Agricultural Operations" excludes
constructing, installing, altering, repairing, dismantling, or demolishing Real
Property structures or Fixtures, including but not limited to grain bins,
irrigation equipment, and fencing.
(c) "Agricultural Production Inputs" means
the following when used for Agricultural Purposes:
1. Seed;
2. Seedlings;
3. Plants grown from seed, cuttings, or
liners;
4. Fertilizers;
5. Insecticides;
6. Livestock and poultry feeds, drugs, and
instruments used for the administration of such drugs;
7. Fencing products and materials regardless
of whether the fencing products or materials become incorporated into Real
Property;
8. Fungicides;
9. Rodenticides;
10. Herbicides;
11. Defoliants;
12. Soil fumigants;
13. Plant growth regulating
chemicals;
14. Desiccants,
including but not limited to shavings and sawdust from wood, peanut hulls,
fuller's earth, straw, and hay;
15.
Feed for Animals, including but not limited to Livestock, fish, equine, hogs,
or poultry;
16. Sugar used as food
for honeybees kept for the commercial production of honey, beeswax, and
honeybees;
17. Cattle, hogs, sheep,
equine, poultry, or bees when sold for breeding purposes;
18. Ice or other refrigerants, including but
not limited to nitrogen, carbon dioxide, ammonia, and propylene glycol used in
the processing for market or the chilling of Agricultural Products in storage
facilities, rooms, compartments, or delivery trucks;
19. Materials, containers, crates, boxes,
labels, sacks, bags, or bottles used for packaging Agricultural Products when
the product is either sold in the containers, sacks, bags, or bottles directly
to the consumer or when such use is incidental to the sale of the product for
resale; and
20. Containers,
plastic, canvas, and other fabrics used in the care and raising of Agricultural
Products or canvas used in covering feed bins, silos, greenhouses, and other
similar storage structures.
(d) "Agricultural Products" means items
produced by Agricultural Operations.
(e) "Animals" is synonymous with "Livestock"
and means living organisms that are commonly regarded as farm animals,
organisms that produce tangible personal property for sale, or organisms that
are processed, manufactured, or converted into articles of tangible personal
property for sale. The term does not include living organisms that are commonly
regarded as domestic pets or companion animals.
(f) "Aquaculture" means an operation or
integrated series of operations in the growing of marine or freshwater
organisms for sale. Aquaculture involves the cultivating of aquatic populations
under controlled conditions, as contrasted with commercial fishing, where the
conditions are not controlled.
(g)
"Consumable Supplies" means tangible personal property, other than Machinery,
Equipment, Agricultural Production Inputs, and energy, that is readily
disposable, or is immediately consumed or expended.
(h) "Energy Used in Agriculture" means fuels
used for Agricultural Purposes, other than fuels subject to prepaid tax as
defined in O.C.G.A. §
48-8-2.
(i) "Farm" means a parcel or tract of land or
contiguous tracts or parcels of land, or, for Aquaculture, an area of lake,
river or sea, devoted primarily to growing or raising, and actively
maintaining, plants and Animals for Agricultural Purposes.
(j) "Fixtures" means tangible personal
property that has been installed or attached to land or to any building thereon
and that is intended to remain permanently in its place. A consideration for
whether property is a Fixture is whether its removal would cause significant
damage to such property or to the Real Property to which it is attached.
Fixtures are classified as Real Property. Examples of Fixtures include but are
not limited to plumbing, lighting fixtures, slabs, and foundations.
(k) "Local Sales and Use Tax" means any sales
or use tax that is levied and imposed in an area consisting of less than the
entire state, however authorized.
(l) "Machinery" is used synonymously with
"Equipment" and means any device or apparatus other than Real Property,
Agricultural Production Inputs, energy, and Consumable Supplies. The terms
"Machinery" and "Equipment" include Repair, Replacement, or Component
Parts.
(m) "Motor Vehicle" means
any self-propelled vehicle designed for operation or required to be licensed
for operation upon the public highways.
(n) "Qualified Agricultural Producer" means a
person defined as such by the Georgia Department of Agriculture.
(o) "Real Property" means land, buildings, or
Fixtures attached to land or buildings.
(p) "Repair Part," "Replacement Part," or
"Component Part" means a part for Agricultural Machinery and Equipment. Repair,
Replacement, or Component Parts must be used to maintain, repair, restore,
install, or upgrade such Agricultural Machinery and Equipment. Examples of
Repair, Replacement, or Component Parts may include but are not limited to
oils, greases, hydraulic fluids, coolants, lubricants, and other
interchangeable tooling.
(3)
Scope of Exemptions: Activities
that are not Agricultural Operations. Except as otherwise provided in
this Rule, inputs, machinery, equipment, and energy used in the following
activities do not qualify for exemption:
(a)
Activities occurring after a finished product has been loaded in or on a truck
or other vehicle for transport for sale;
(b) Research and development
activities;
(c) Landscaping
activities for recreation or beautification, such as the maintenance of lawns
or golf courses;
(d) The operation
of a sales facility;
(e)
Subsistence farming, hobby farming, and activities that will generate less than
$5,000.00 in sales annually; and
(f) Administrative activities, including but
not limited to sales promotion, general office work, credit and collection,
purchasing, and clerical work.
(4)
Exemption for Agricultural
Production Inputs. Sales of Agricultural Production Inputs, as defined
in this Rule, to Qualified Agricultural Producers holding a Georgia Agriculture
Tax Exemption (GATE) Certificate issued by the Georgia Department of
Agriculture are exempt from state sales and use tax and all Local Sales and Use
Tax.
(5)
Exemption for
Agricultural Machinery and Equipment. Sales (including leases) of
Agricultural Machinery and Equipment, as defined in this Rule, to Qualified
Agricultural Producers holding a GATE Certificate are exempt from state sales
and use tax and all Local Sales and Use Tax. The exemption includes Machinery
and Equipment expressly listed in O.C.G.A. §
48-8-3.3(a)(1)(B)
and Machinery and Equipment used in Agricultural Operations.
(a)
Machinery and Equipment used in
Agricultural Operations. Agricultural Operations can differ
significantly from one to another. Thus, when determining whether Machinery or
Equipment is used in Agricultural Operations, the Department of Revenue may
evaluate the facts and circumstances of each case.
1. Examples of Machinery or Equipment that
are not used in Agricultural Operations at any time generally include but are
not limited to:
(i) Motor Vehicles;
(ii) Power lines or transformers that provide
electricity to an agricultural operation;
(iii) Real Property, other than grain bins,
fencing, and irrigation equipment used in an Agricultural Operation, including
but not limited to concrete slabs and foundations, and structures or Fixtures
used for ventilation, heating, cooling, illumination, communications, plumbing,
or the personal comfort and convenience of employees;
(iv) Administrative Machinery or Equipment,
including computers, related computer peripherals, servers, copiers,
telephones, facsimile machines, office furniture, office furnishings, office
supplies such as paper and pencils, and educational materials used for
non-agricultural functions, including but not limited to sales, marketing,
research and development, accounting and payroll, and purchasing;
(v) Machinery or Equipment that is not
operated under the control of the Qualified Agricultural Producer's employees
or other persons under the Qualified Agricultural Producer's direction and
control; and
(vi) Living organisms
of any kind, including but not limited to people, Animals, and bacteria
utilized in irrigation.
2. Except as otherwise provided in this Rule,
Machinery and Equipment used in Agricultural Operations generally include but
are not limited to Machinery and Equipment used:
(i) In the production of poultry and eggs for
sale, including but not limited to brooder bulbs and Machinery and Equipment
used in the cleaning or maintenance of poultry houses;
(ii) In the hatching and breeding of poultry
and the breeding of Livestock and equine;
(iii) In the production, processing, and
storage of fluid milk for sale;
(iv) In the drying, ripening, cooking,
further processing, or storage of Agricultural Products;
(v) In the production of poultry, eggs, fluid
milk, equine, or Livestock for sale;
(vi) For the purpose of harvesting
Agricultural Products to be used on the Farm by that producer as feed for
poultry, equine, or Livestock;
(vii) In tilling the soil or in Animal
husbandry;
(viii) Exclusively for
irrigation of Agricultural Products, including but not limited to fruit,
vegetable, and nut crops regardless of whether the irrigation Machinery or
Equipment becomes incorporated into Real Property;
(ix) To cool Agricultural Products in storage
facilities;
(x) To produce
Aquacultural products;
(xi) To
maintain, clean, repair, restore, install, or upgrade Agricultural Machinery
and Equipment;
(xii) To provide
worker safety or to protect the quality of the Agricultural Product, including
but not limited to safety Machinery and Equipment required by federal or state
law, gloves, ear plugs, face masks, protective eyewear, hard hats or helmets,
and breathing apparatuses, regardless of whether the items would otherwise be
considered Consumable Supplies; and
(xiii) In harvesting timber, including all
off-road Equipment and related attachments used in every forestry procedure
starting with the severing of a tree from the ground until and including the
point at which the tree or its parts in any form has been loaded in the field
in or on a truck or other vehicle for transport to the place of use. Such
off-road Equipment includes but is not limited to skidders, feller bunchers,
debarkers, delimbers, chip harvesters, tub-grinders, woods cutters, chippers of
all types, loaders of all types, dozers, mid-motor graders, and the related
attachments.
3.
Primary purpose. Except as otherwise provided in this Rule, an
item of Machinery or Equipment qualifies for exemption only if its primary
purpose is for use in an Agricultural Operation. "Primary purpose" means the
purpose for which an item of tangible personal property is used more than
one-half of the total amount of time that the item is in use. Alternatively,
instead of time, the purpose may be measured in terms of other applicable
criteria such as the number of items produced. The Department of Revenue may
consider any reasonable methodology for measuring the primary purpose of
Machinery or Equipment for which the primary purpose is not readily
identifiable.
(b)
Parts withdrawn from inventory. Miscellaneous parts for which the
ultimate use is unknown at the time of purchase are eligible for the exemption
as Repair, Replacement, or Component Parts. However, use tax must be accrued
and remitted if parts are withdrawn from the inventory of parts and used for
any purpose other than to maintain, repair, restore, install, or upgrade
Agricultural Machinery and Equipment.
(6)
Exemption for Energy Used in
Agriculture. Sales of Energy Used in Agriculture, as defined in this
Rule, to Qualified Agricultural Producers holding a GATE Certificate are exempt
from state sales and use tax and all Local Sales and Use Tax.
(a)
Metered energy. In order to
purchase metered Energy Used in Agriculture without the payment of tax, the
energy must be metered separately from energy used for non-agricultural
purposes. Qualified Agricultural Producers must present to their energy
providers the GATE Certificate and the account numbers and service addresses of
meters to which the exemption applies.
1.
De minimis use exception. If a single meter supplies energy for
Agricultural Purposes and energy for de minimis non-agricultural purposes, a
GATE Certificate holder is permitted to purchase all of the energy supplied
from the meter without the payment of tax, so long as that meter does not
supply energy for a personal residence. De minimis use means use that
represents ten (10) percent or less of the total amount of energy supplied by a
single meter.
(b)
Non-metered energy. Qualified Agricultural Producers holding the
GATE Certificate are permitted to purchase non-metered energy, such as propane
and wood, tax exempt. Producers, however, must accrue and remit use tax on any
portion of the energy that is not used for Agricultural Purposes.
(c)
Examples of Energy Used in
Agriculture. Energy Used in Agriculture includes but is not limited to:
1. Off-road diesel, propane, butane,
electricity, natural gas, wood, wood products, wood by-products and liquefied
petroleum gas;
2. Fuel used in
structures in which broilers, pullets, or other poultry are raised, in which
swine are raised, in which dairy Animals are raised or milked or where dairy
products are stored on a Farm, in which Agricultural Products are stored, and
in which plants, seedlings, nursery stock, or floral products are raised
primarily for the purpose of making sales of such plants, seedlings, nursery
stock, or floral products for resale;
3. Fuel for the operation of an irrigation
system which is used on a Farm exclusively for the irrigation of Agricultural
Products; and
4. Fuel used in the
drying, cooking, or further processing of raw Agricultural Products.
(d)
Examples of energy that
is not exempt under O.C.G.A. §
48-8-3.3.
1. Energy not used for Agricultural
Purposes;
2. Gasoline, clear
diesel, and aviation gasoline;
3.
Liquefied petroleum gas and special fuel (including compressed natural gas)
when used to propel a Motor Vehicle on the public highways;
4. Energy used for administrative activities;
and
5. Energy used in a personal
residence.
(7)
Certificates of Exemption. Department of Revenue Agricultural
Certificate of Exemption (Form ST-Al) is not valid for purchases occurring on
or after January 1, 2013.
(a)
GATE
Certificate. Any person making a sale or lease of Agricultural
Production Inputs, Agricultural Machinery and Equipment, or Energy Used in
Agriculture must collect sales and use tax unless such person, in good faith,
takes from the purchaser or lessee a GATE Certificate.
1. Qualified Agricultural Producers may
obtain a GATE Certificate from the Georgia Department of Agriculture.
2. GATE Certificate holders must meet the
requirements of this Rule to qualify for the exemptions in O.C.G.A. §
48-8-3.3.
3. Effective May 3, 2018, GATE card
applicants are required by O.C.G.A. §
48-8-3.3(d)(2)
to provide to the Georgia Department of Agriculture a valid state taxpayer
identification number. For out-of-state GATE applicants that are not required
to file any Georgia tax returns,"a state taxpayer identification number" means,
for purposes of this Rule only, a social security number or a federal employer
identification number (FEIN or EIN). For all other applicants,"a state taxpayer
identification number" means, for purposes of this Rule only, the applicant's
Georgia sales and use tax account number, Georgia individual income tax account
number (social security number), or Georgia corporate income tax account number
(federal employer identification number).
(b)
Refunds. When tax is
remitted on the purchase or lease of exempt Agricultural Production Inputs,
Machinery, Equipment, or Energy Used in Agriculture, Qualified Agricultural
Producers holding a GATE Certificate may apply to the Department of Revenue for
a refund pursuant to O.C.G.A. §
48-2-35. For
purchases occurring on or after January 1, 2013, tax will not be refunded
unless the purchaser held a GATE Certificate at the time of
purchase.
(8)
Non-transferability. Exemptions under this Rule are
non-transferable.
(9)
Manufacturers. Every person defined as a "dealer" in O.C.G.A.
§
48-8-2 is
required to file a sales and use tax registration for each place of business in
this state. A dealer that qualifies for manufacturing exemptions under O.C.G.A.
§
48-8-3.2 and agricultural exemptions under O.C.G.A. §
48-8-3.3 at a single place of business may avail itself of the exemptions under either
O.C.G.A. §
48-8-3.2 or O.C.G.A. §
48-8-3.3, but not both, for that place of business in any one calendar year.
(10)
Contractors.
Notwithstanding subsection (c) of O.C.G.A. §
48-8-63, contractors will not incurany use tax on:
(a)
Tangible personal property that a Qualified Agricultural Producer purchases
tax-exempt under O.C.G.A. §
48-8-3.3 and furnishes to such contractor for use in the performance of an agricultural
operation, so long as such property retains the character of tangible personal
property and is returned to the Qualified Agricultural Producer upon the
completion of the contract; or
(b)
Grain bins, irrigation equipment, and fencing or the Repair, Replacement, or
Component Parts to grain bins, irrigation equipment, or fencing that a
Qualified Agricultural Producer purchases tax-exempt under O.C.G.A. §
48-8-3.3 for use in an agricultural operation and furnishes to such contractor for
installation into Real Property.
Notes
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