Arkansas Code Ann. §26-52-403, 404, and 405 provide exemptions from sales tax on livestock, chemicals, feed, machinery, and seed. The exemptions only apply to eligible farmers who are engaged in the business of commercial farming.
“Eligible farmer” (A.C.A. § 26-52-517) means a person or entity that: (A) Is engaged in farming; (B) Has demonstrated to the Secretary of the Department of Finance and Administration that the person or entity has the resources and capacity to produce food, fiber, grass sod, or nursery products in commercially marketable quantities.
“Farming” means the agricultural production of food or fiber as a business or the agricultural production of grass sod or nursery products as a business.
Examples of Exempt Items*
- Tractor
- Mechanical Pickers
- Milking Equipment
- Combine
- Irrigation Equipment
- Vaccinations for Livestock
- Cultivator
- Threshers
- Seed
- Sprayer/Spreader
- Feed
- Agricultural Chemicals
- Plow/Planter
- Stock Panels
- Fertilizer
Examples of Non-Exempt Items*
- Repairs for Farm Equipment
- Lubricants and Oil for Maintaining Equipment
- Fencing Materials
- Railroad Cars
- Building Materials
- Attachments not Essential to Farm Equipment
- Vehicles Licensed for Highway Use
- Golf Carts
- Metal Buildings
- Tires
- Utility Trailers
- Lawn Mowers/Lawn or Garden Tractors
*Not an all-inclusive list
How to Claim an Exemption with a Vendor
An eligible farmer can claim a commercial farm sales tax exemption in two ways:
- Farmers may complete an application available on the Arkansas Taxpayer Access Point (ATAP) to obtain an Arkansas Farmer Sales Tax Exemption card.
a. The card will provide the name and address of the farm or farmer, issue and expiration date, and a unique card number to assist retailers in properly accounting for nontaxable sales made to a person engaged in commercial farming.
b. The card will remain active for eight (8) years for an initial cost of twenty dollars ($20.00).
c. The renewal cost of the card is ten dollars ($10.00).
- Farmers may claim a commercial farm sales tax exemption by completing the Commercial Farming Sales Tax Exemption (ST-403) form or the Exemption Certificate (ST-391) and providing it to retailers when purchasing eligible items for commercial farming.
Questions?
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