Can farm equipment be leased tax-free?
Yes. The lease of equipment used exclusively in agricultural production by a farmer who holds a valid Farmer Tax Exemption Permit is exempt from tax. 18. Can services like plowing, planting, harvesting, fertilizer application, or repairs to farm vehicles be bought tax-free with a Farmer Tax Exemption Permit? No. The exemption is limited to purchases of goods. A farmer is liable for sales and use taxes on the purchase of any taxable service. Plowing, planting, harvesting, fertilizer application and other services are taxable as services to income-producing real property. Repairs to a farm vehicle are taxable as motor vehicle repair services. (However, repair parts for vehicles and machinery used exclusively in agricultural production may be purchased with a Farmer Tax Exemption Permit.) 19. If an individual operates a farm and also provides “custom hire work” such as plowing, fertilizer application or harvesting to other farmers, can he or she purchase the machinery and supplies to perf
