Texas – Retailer’s Guide to the Agricultural and Timber Exemption Registration Requirement

SALT Report 1335 – The Texas Comptroller of Public Accounts has released a publication explaining the new requirements for claiming an exemption on qualified commercial agricultural and timber items. Beginning January 1, 2012, purchasers of exempt items used in the production of agriculture and timber products must provide a Texas Agriculture and Timber Registration Number issued by the Comptroller of Public Accounts on the exemption certificate or confirmation letter issued to the retailer.

New Exemption Certificates Required
Effective January 1, 2012 retailers may no longer accept the current generic Texas Sales and Use Tax Exemption Certification (Form 01-339) from customers claiming the agricultural or timber operations exemption.  Instead a purchaser claiming an agricultural or timber exemption on exempt items must provide to the retailer the appropriate new exemption certificate or confirmation letter with the purchaser’s Ag/Timber Number:
Blanket Exemption Certificates Must be Updated

Retailers who currently have on file blanket exemption certificates using Exemption Certificate (01-339) must obtain from their customers one of the new exemption certificates (either Form 01-924 or 01-925) or confirmation letter with the customer’s Ag/Timber Number.  The updated exemption certificate or confirmation letter will be good until the customer revokes the certificate or letter in writing to the retailer or the retailer is notified the Ag/Timber Number associated with the exemption certificate or confirmation letter has expired, been canceled or suspended.

The publication also covers the following topics:

  • Obtaining a registration number
  • Vendor verification of a registration number
  • Recommended language for invoices used in connection with a blanket exemption certificate or confirmation letter
  • Retailer’s good faith acceptance of exemption certificate
  • Record-keeping
  • Refunds
  • Qualifying exempt items
  • Always-exempt items that do not need an ag/timber number or exemption certificate
  • Exempt items that need an exemption certificate but not an ag/timber number
  • Sales to out-of-state purchasers; and
  • Sales for resale