The Tennessee Department of Revenue and the Tennessee Department of Agriculture has issued a public reminder noting that a new law that took effect in the new year made certain items tax-free for qualified farmers, timber harvesters, and nursery operators.
As of January 1, farmers and nursery operators have the opportunity to purchase building materials, fencing materials, warranties, and most other tangible personal property used primarily in agricultural operations tax-free.
The Department of Revenue defines “agricultural operations” as “land, buildings, and machinery used in the commercial production of farm products and nursery stock,” as well as the “activity carried on in connection with the commercial production of farm products and nursery stock.”
HEADS UP FARMERS: @GovBillLee has a special message for the Tennessee agriculture community! As a reminder, as of January 1st, MUCH more is included in the Agriculture Sales Tax Exemption. Check out the important notice here: https://t.co/SoAZvrw4CF@TNAgriculture pic.twitter.com/0G1h6K1C9P
— TN Dept of Revenue (@TNDeptofRevenue) January 18, 2023
“Thanks to the partnership of the General Assembly, Tennessee’s newly-expanded tax exemption will keep more hard-earned dollars in the pockets of Tennessee farmers and ensure that our agriculture industry continues to thrive,” Governor Bill Lee said in a video message in regards to the tax exemption for farmers.
The new law does not apply tax exemptions to automobiles, trucks, household appliances, or gasoline or diesel fuel used in vehicles on public highways, the Department of Revenue notes.
“The new tax exemptions will greatly benefit Tennessee’s farmers and foresters when purchasing what they need for their operations to thrive,” Agriculture Commissioner Charlie Hatcher, D.V.M. said in a statement. “As Tennessee’s number one industry, when agriculture is strong, everyone benefits. We appreciate our policymakers for recognizing the importance and impact of ag.”
It is estimated that approximately $78 billion was the value that agriculture and forestry contributed to Tennessee’s $746 billion economy in 2019, according to data compiled by the University of Tennessee’s Institute of Agriculture.
Farmers are eligible to purchase farm equipment and machinery tax-free by showing their Tennessee sales tax exemption card to the seller of such goods.
To obtain a card, qualifying farmers, timber harvesters, and nursery operators must complete the Agricultural Sales and Use Tax Exemption application.
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Kaitlin Housler is a reporter at The Tennessee Star and The Star News Network.