SECTION .1100 ‑ SALES OF TOBACCO items: FARM MACHINES AND MACHINERY

 

17 NCAC 07B .1101          FARM MACHINES: MACHINERY: TOBACCO ITEMS

(a)  Sales to farmers of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery for use by them in planting, cultivating, harvesting or curing of farm crops including nursery or greenhouse stock and products of the forest, or to dairy operators, poultry farmers, egg producers, and commercial producers of animals are exempt from sales and use tax.  Sales of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery to farmers for any purpose or use not defined in this Rule, or to any person other than a farmer as herein defined, even though for a use or purpose herein defined, are subject to the applicable statutory state and local sales or use tax without limitation.  In other words, to qualify for the exemption from sales and use tax, the transaction must be a sale of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery to a farmer for one of the uses or purposes herein defined and unless all three conditions are met, the sale is subject to the applicable statutory state and local sales or use tax without limit.

(b)  Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption, may be completed by a farmer or producer and accepted by a vendor as the authority for exempting from the sales and use tax the following:

(1)           farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery for use in planting, cultivating, harvesting or curing farm crops, including nursery or greenhouse stock and products of the forest, or for use in the production of dairy products, poultry, eggs, livestock, fish or aquatic plants.

(2)           The lease or rental of tobacco sheets used in handling tobacco in the warehouse and transporting tobacco to and from the warehouse.

(3)           A metal flue sold for use in curing tobacco, whether the flue is attached to a handfired furnace or used in connection with a mechanical burner.

(4)           A bulk tobacco barn or rack, parts and accessories attached to the tobacco barn or rack, and any similar apparatus, part, or accessory used to cure or dry tobacco or another crop.

(5)           A grain, feed, or soybean facility, and parts and accessories attached to the facility.

(6)           Containers for use in the planting, producing, harvesting, curing, marketing, packaging, sale, or transporting or delivery of products when such containers do not go with and become a part of the sale of products.

(7)           Wrapping paper, labels, wrapping twine, paper, cloth, plastic bags, cartons, packages and containers, wooden boxes, baskets, coops, barrels, and like articles sold to farmers and producers when such materials are used for packaging, shipment or delivery of tangible personal property which is sold either at wholesale or retail and when such articles constitute a part of the sale of such tangible personal property and are delivered with it to the customer.

(c)  When a customer makes a purchase and executes a Form E-595E, Streamlined Sales Tax Agreement Certificate of Exemption which is then furnished to the vendor, the vendor is relieved of the liability for any additional tax that is subsequently determined to be due and the purchaser has assumed liability for the tax if the vendor has a fully completed Form E-595E on file.  In the absence of the certificate or other documentation to support an exemption from tax, the vendor is liable for any additional tax determined to be due on a transaction.

(d)  The following are examples of sales of farm machinery, attachment and repair parts for farm machinery, and lubricants applied to farm machinery which are exempt when sold to farmers for use by them in planting, cultivating, harvesting or curing farm crops:

(1)           tractors,

(2)           plows,

(3)           harrows,

(4)           cultivators,

(5)           mowers,

(6)           planters,

(7)           corn pickers and snappers,

(8)           manure spreaders,

(9)           manure loaders,

(10)         harvester threshers,

(11)         rotary tillers,

(12)         fertilizer distributors,

(13)         wind‑rowers,

(14)         forage blowers,

(15)         stalk cutters,

(16)         seeders,

(17)         grain loaders,

(18)         harvesters,

(19)         cotton pickers,

(20)         rotary hoes,

(21)         corn and hay elevators,

(22)         tobacco curers,

(23)         tobacco flues,

(24)         tobacco trucks or slides,

(25)         wagons,

(26)         non‑highway trailers,

(27)         mechanical rakes,

(28)         balers,

(29)         rod weeders,

(30)         combines,

(31)         tobacco transplanters,

(32)         shredders for corn stalks,

(33)         power loader lifts,

(34)         platform carriers,

(35)         portable insecticide sprayers,

(36)         chain saws,

(37)         motor oils, greases, lubricants and anti‑freeze;

(38)         hydraulic fluids.

(e)  Examples of items which are subject to the applicable statutory state and local sales or use tax when sold to farmers for general purposes:

(1)           lawn mowers;

(2)           snow plows;

(3)           oil storage tanks and fittings;

(4)           drainage tile;

(5)           paint, cleaning compounds and brushes;

(6)           baler twine;

(7)           tobacco sticks and tobacco twine;

(8)           tools for maintaining machinery and equipment.

(f)  The lists in Paragraphs (d) and (e) of this Rule are not intended to be exclusive, but are for illustrative purposes only. If there is any question as to the tax status of any item which does not appear therein, such question shall be submitted to the secretary, together with a detailed statement of the business of the purchaser, the design and structure of the article, and its use, to the end that the applicable rate of tax may be correctly determined.

(g)  The word farmer as used in this Rule includes crop farmers, dairy operators, poultry farmers, egg producers, livestock farmers, nurserymen, greenhouse operators, farmers who raise fish or water plants, orchardmen and other persons coming within the generally accepted definition of the word.  It does not include a person who merely cultivates a garden for personal use.

 

History Note:        Authority G.S. 105‑164.4; 105‑164.6; 105-164.13; 105‑262; Article 39; Article 40; Article 42; Article 43; Article 44;

Eff. February 1, 1976;

Amended Eff. June 1, 2006; August 1, 1996; April 1, 1995; July 1, 1994; October 1, 1993; June 1, 1992.