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

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 CERTIFICATION