Ohio State Tax Blog

Current developments, commentary and helpful resources regarding Ohio state and multistate taxes from attorneys Steven A. Dimengo and Richard Fry. We concentrate on all aspects of Ohio state taxation, including sales/use tax, income tax and commercial activity tax, from audits to appeals before the Ohio Board of Tax Appeals and Ohio Supreme Court, and have significant experience in multistate tax planning. Contact us.

Home Archives Ohio Sales Tax Ohio Sales and Use Tax - Agriculture Exemption
Ohio Sales and Use Tax - Agriculture Exemption PDF Print E-mail
Wednesday, 26 September 2012 14:09

Generally, Ohio sales and use tax is not imposed upon tangible personal property used or consumed directly in agricultural activities. R.C. 5739.02(B)(42)(n). Similar to the manufacturing exemption, the following items purchased by persons engaged in farming, agriculture, horticulture or floriculture are exempt from Ohio sales / use tax:

  • Items to be incorporated into tangible personal property produced for sale;
  • Items used or consumed directly in producing tangible personal property for sale;
  • Items used or consumed directly in producing, or incorporated into, tangible personal property which will be used directly in producing products for sale;
  • Items used or consumed in conditioning or holding products produced for sale; and
  • Products used to cultivate or stimulate growth of crops or flowers to be sold.

O.A.C. § 5703-9-23. Where a direct use in the agricultural activity is required, the item’s particular use is crucial as it must directly act upon the product being produced for sale. Ohio Tax Comm’r Opinion 93-0004 (Aug. 26, 1993). The agriculture exemption is consistent with the overriding intent of sales and use taxes to tax sales to consumers or end-users, but not property used in producing, or in this case growing, such consumer products.

Notwithstanding, property incorporated into real property is not exempt from Ohio sales / use tax. For example, irrigation pipes purchased and installed by a farmer and building materials incorporated into a storage silo for agricultural products are subject to tax because the items become real property upon installation. However, likely through successful lobbying efforts, portable grain bins, field tile, and livestock and horticulture structures, and items incorporated into such structures, are exempt from tax. Ohio Information Release ST 2002-02 (Issued April 2002; Revised May 2007).

Please contact us if you need help determining which items are entitled to the agriculture exemption. 

 
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Ohio State Tax Attorney, Steven A. Dimengo

Steve Dimengo is recognized as one of the leading tax attorneys in Ohio, where he has been serving clients for over twenty-five years. Full Profile. Cases. Email.

 

Ohio State Tax Attorney, Richard B. Fry III

Richard Fry is an Associate focusing on business law, specifically taxation. He holds a J.D. and Masters of Taxation from the University of Akron. Full Profile. Email.

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Steve will be speaking at the Lorman Sales and Use Tax in Ohio Seminar to be held in Akron on January 21, 2014.  He will be discussing Manufacturing Exemptions, Transfer of Business and Personal Liability for Sales tax.  Click here to see more (and register).

 

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