“The law created a new tax exemption number for Texas agriculture producers,” Mundine said. “Farmers and ranchers need to take note of the change.”
Mundine said the registration number requirement does not change the agriculture/timer exemption that has been in place since 1961. Anyone engaged in the production of agriculture or timber product still qualifies.
“The new law is aimed at curbing abuse of those who falsely claim the exemption, costing sales tax dollars to the state, municipalities and local communities,” Mundine said.
In the past, anyone who bought product for use in agricultural production had only to verbally state they were sales tax exempt, and fill out a form. Beginning Jan. 1, a person claiming an exemption from sales tax on the purchase of agricultural items must provide a registration number, which will be issued by the comptroller.
“This new procedure is an important tool to protect the integrity of the sales tax exemption,” Mundine said. “In lean years like 2011, this important exemption for farmers and ranchers can be the difference between staying in business or not.”
Farmers and ranchers must apply for the tax exemption number, which starts Jan. 1, 2012. The number will be presented to sellers to be exempt from sales and use taxes when making agricultural purchases.
The agriculture tax exemption number is received from the state comptroller, who can be reached by calling toll free 1-800-252-555, or E-mail http://www.window.state.tx.us/taxinfo/agriculture.