Business tax tip #11 

Sales and Use Tax Exemptions for Agriculture 

Are sales of agricultural equipment exempt from tax? 

The sales and use tax does not apply to sales, including rentals, to a farmer of farm equipment 
used to raise livestock and poultry, prepare, irrigate or tend the soil, or plant, service, harvest, 
store, clean, dry or transport seeds or crops. Farm equipment that is used for traditional 
agricultural purposes is exempt from sales and use tax even if attached to real property. 

Examples of farm equipment 

Balers                     Feed grinders  
Beekeeping equipment       Feeders 
Binders                    Forage harvesters 
Blowers                    Grain handling equipment 
Choppers                   Haybines 
Conveyers                  Irrigation equipment  
Corral Handling Equipment  Livestock/poultry fans 
Cribs                      Milk cans 
Crushers                   Milking machines 
Cultipackers               Milk coolers 
Diggers                    Mowers 
Drags                      Poultry equipment 
Rollers                    Rollers 
Scales                     Rotary hoes 
Drills                     Seed cleaners 
Dryers                     Seeders 
Dusters                    Shellers 
Egg handling equipment     Sorters 
Elevators                  Storage tanks 
Farm graders               Sprayers 
Farm loaders               Subsoilers 
Farrowing crates           Vaccinating panels 

What else is included in this exemption? 

Both replacement parts and components, including hydraulic oil, are also exempt. 

Are there any exemptions for food processing? 

Yes. If a farmer is engaged in processing food for sale, there are exemptions available for 
purchases of capitalized equipment and consumables. These exemptions are explained in 
Business Tax Tip #9 - Sales and Use Tax Exemptions for Production Activities. 

Does the tax apply to sales of livestock? 

No. Sales, for agricultural purposes, of livestock, including poultry, are not taxable. Also exempt 
are sales of feed or bedding for livestock. The raising of horses for breeding purposes is an 
agricultural purpose, but the maintenance or sale of riding, show or race horses is not. The 
raising of livestock by members of 4-H or similar organizations for agricultural educational 
purposes qualifies for tax exemption, but the maintenance and sale of pets, dogs for breeding 
purposes and animals for testing purposes does not. 

Are there any exemptions for agricultural supplies? 

Yes. When sold for agricultural purposes, seeds (including plants and seedlings), fertilizer, lime, 
fungicide, herbicide and insecticide are exempt. These items are exempt when used for raising 
vegetables at home but are not exempt when used to maintain a flower or other decorative 
garden or lawn. The tax does not apply to sales of containers used by a farmer to transport farm 
products to the market or to sales of baler twine or wire. Fuel for use in farm equipment or a 
farm tractor is also exempt. 

Is aquaculture given the same treatment as agriculture? 

Yes. Commercial aquaculture and agriculture are treated the same way for sales and use tax 
purposes.  

Are tax numbers needed to claim agricultural exemptions? 

No. It is not necessary for purchasers to register with the Comptroller’s Office in order to claim 
agricultural exemptions. 

What records of sales should vendors who sell agricultural equipment and supplies maintain? 

When the record of sale does not clearly include all elements necessary to justify exemption, a 
vendor may ask for a signed statement to indicate that the customer is a farmer or that the 
purchases will be used only for agricultural purposes. Even if a certification is provided, a vendor 

must collect the tax, if he or she knows or should know that the purchase does not qualify for 
exemption. 

What kinds of items are not exempt? 

Only those items sold under the specific conditions described in this publication are exempt. 
Sales of hand tools, carpentry, cleaning and maintenance supplies, materials to be incorporated 
into real property, and materials purchased for personal, rather than agricultural use, are subject 
to the sales and use tax. 

Examples of non-exempt items 

Antifreeze                                        Motor Oil 
Barbed wire                                       Pails  
Brooms                                            Paint 
Cement                                            Paint brushes 
Clothing                                          Posthole diggers 
Detergents                                        Pruners 
Electric drills                                   Rakes 
Fencing material                                  Riding lawnmowers 
General water systems                             Roofing materials 
Hammers                                           Sandpaper 
Home appliances                                   Saws 
Incinerators                                      Shovels 
Light bulbs                                       Snow blowers 
Lubricants                                        Three-wheeled vehicles  
 
Are there any special provisions for sales by farmers? 

Yes. The tax does not apply to the sale of an agricultural product by a farmer. However, sales of 
flowers, sod, decorative trees, shrubs and any other products usually sold by a nursery or 
horticulturist do not qualify for this exemption. 

       Maryland Sales and Use Tax

       Agricultural Exemption Certificate

To:
                  Name of Dealer

   I hereby certify that all purchases made by me from the above named dealer on
   and after the date set forth below are exclusively for use in producing products 
   for sale unless otherwise specified on any order.

   I further certify that I am a farmer engaged in the business of producing agricultural
   products for sale, that I am marketing agricultural products produced by me and 
   that this certification is true and correct to the best of my knowledge and belief.

                  Signature of Farmer

                  Street Address

   City and State State                             Zip Code

   Date