How Can I Become Ag Exempt in Texas?
One of the most common questions we are asked by our clients is, “How do I qualify for an Ag Exemption?” Although there are many specific requirements for each county, we have included a list of frequently asked questions about Ag and Timber Exemptions, links to applications, and local county contact information. Let Mayben Realty help you get started on your exemptions today!
Who Qualifies for Agricultural and Timber Exemptions?
If you are a farmer, rancher or timber producer engaged in one of the activities listed below, you qualify for tax exemption on the purchase of certain items used to produce your agricultural and timber products for sale.
All purchasers, including non-Texas residents, must have a valid agricultural and timber registration number (Ag/Timber Number) issued by the Comptroller to claim exemption from Texas tax.
If you do not have a valid Ag/Timber Number, you must pay tax to retailers on your purchases.
What Activities Qualify?
- farming or ranching for the purpose of raising agricultural products for sale;
- production of fiber crops (cotton, hemp, flax, etc.) for sale;
- timber production (including contract logging);
- feedlot operation;
- commercial fish farm operation;
- bee keeping;
- custom harvesting;
- crop dusting (as defined by 14 CFR Section 137.3);
- growing plants for sale in a commercial nursery;
- a veterinary business that makes farm or ranch calls;
- Future Farmers of America or 4-H; or
- teaching an agricultural vocational course.
What Activities Do Not Qualify?
- home gardening;
- horse (PDF) racing, boarding, training or trail rides;
- rodeos, circuses or zoos;
- florists or similar retailers who maintain plants before sale;
- wildlife management and conservation;
- hunting and fishing operations, including aerial hunting;
- predator control;
- wildlife or livestock surveys;
- commercial fishing;
- companion animal (pet) breeding; and
- kennels or other animal boarding businesses.
I breed and sell horses. Do I qualify for an ag/timber number to purchase eligible items tax free?
Yes. Persons who breed and sell horses in the regular course of business (including standing studs or using live cover, shipped semen or artificial insemination) qualify for an ag/timber number. Equipment used exclusively on the farm or ranch to produce horses for sale can be purchased tax-free.
I have a working ranch and sell the cattle I raise. I don't raise horses for sale, but I do use them to herd my cattle and ride fences. Can I use my ag/timber number to make tax-free purchases on items used for my work horses?
Yes. Commercial cattle ranchers can claim an exemption on equipment used on their ranch in the production of cattle, including items used for their work horses. The exemption applies to items such as ropes, lariats, hotshots, whips, canes, horse tack items, horseshoes, nails, halters and bridles, as long as they are used exclusively on the ranch with the work horses.These items do not qualify for exemption if they are used in any other manner. For example, a bridle purchased for a horse used to work cattle is exempt, while a bridle for a rodeo, show or race horse is taxable.
I am a landowner. I lease my land to a tenant who uses the land to produce agricultural products for sale. I am responsible for maintaining the fences. Am I eligible for an ag/timber number to purchase items tax free, such as the fencing for the land?
No. To be eligible for an ag/timber number, you must produce agricultural products for sale in the ordinary course of business.
I lease my land to a person who raises cattle for sale. The cattle graze on this land, and my lease agreement states that I am responsible for providing grass for the cattle. Do I qualify for an ag/timber number?
Yes. Because your contract requires you to provide grass for the cattle, you can obtain an ag/timber number and use it to purchase tax-free items used exclusively to produce the grass.
How to Apply for a Texas Agricultural and Timber Registration Number (Ag/Timber Number)
To claim a tax exemption on qualifying items, you must apply for an agricultural and timber registration number (Ag/Timber Number) from the Comptroller. You must include the Ag/Timber Number on the agricultural exemption certificate (PDF) or the timber exemption certificate (PDF) when buying qualifying items.
AG/TIMBER NUMBER APPLICATION
AG EXEMPTION APPLICATION
FAQ’S ABOUT AG EXEMPTION
TITUS COUNTY AG AND TIMBER BOARD
CAMP COUNTY CAD/ LINK TO FORMS
FRANKLIN COUNTY CAD/ LINK TO FORMS