§305.3. Exemptions; agricultural

            A. The sales and use tax imposed by taxing authorities shall not apply to sales at retail of agricultural inputs, agricultural machinery and equipment, and other agricultural tangible personal property, provided that the purchase is directly related to the business activities of the purchaser.

            B. For purposes of this Section the following terms shall have the following meanings:

            (1) "Agricultural commodity" means horticultural, viticultural, poultry, farm and range products, and livestock and livestock products.

            (2) "Agricultural inputs" means all of the following:

            (a) Raw agricultural commodities, including but not limited to feed, seed, and fertilizer, to be utilized in preparing, finishing, manufacturing, or producing crops or animals for market by a commercial farmer.

            (b) Raw materials for the production of raw or processed agricultural, silvicultural, or aquacultural products.

            (c) Pharmaceuticals administered to livestock used for agricultural purposes.

            (d) Every agricultural commodity sold by any person, other than a producer, to any other person who purchases not for direct consumption but for the purpose of acquiring raw product for use or for sale in the process of preparing, finishing, or manufacturing the agricultural commodity for the ultimate retail consumer trade, including payment of the tax applicable to the sale, storage, use, transfer, or any other utilization of or handling thereof, except when such agricultural commodity is actually sold as a marketable or finished product to the ultimate consumer, and in no case shall more than one tax be exacted.

            (e) Seeds sold to a commercial farmer for use in the planting of any kind of crops.

            (f) Diesel fuel, butane, propane, or other liquefied petroleum gases used or consumed for farm purposes by a commercial farmer.

            (3) "Agricultural machinery and equipment" means all of the following:

            (a) The first one hundred fifty thousand dollars of the sale price of farm equipment. The purchaser or his representative shall provide on any exemption certificate required for this exemption a certification that the purchaser is a commercial farmer or is purchasing for an agricultural facility. The department shall hold the purchaser responsible for any taxes due.

            (b) Agricultural fencing materials, including gates, hog wire fencing, barbed wire fencing, lumber or steel used as posts or rails, nails, screws, hinges, and concrete consisting of premixed dry mortar used for the purpose of fencing agricultural livestock. Agricultural fencing materials shall also include electric fence wire, insulated posts, power sources, grounding systems, warning signs, and other components of electric agricultural fencing.

            (4) "Farm equipment" means and includes all of the following:

            (a) Rubber tired farm tractors, cane harvesters, cane loaders, cotton pickers, combines, haybalers, and attachments and sprayers.

            (b) Clippers, cultivators, discs, plows, and spreaders.

            (c) Irrigation wells, drives, motors, and equipment.

            (d) Other farm implements and equipment used for agricultural purposes in the production of food and fiber.

            (e) On the farm facilities used to dry or store grain or any materials used to construct such on the farm facilities.

            (f) Polyroll tubing sold to a commercial farmer or used for commercial farm irrigation.

            (5) "Other agricultural tangible personal property" means all of the following:

            (a) The gross proceeds derived from the sale in this state of livestock, poultry, and other farm products direct from the farm, provided that the sales are made directly by the producers. When sales of livestock, poultry, and other farm products are made to consumers by any person other than the producer, they are not exempted from the tax imposed by taxing authorities.

            (b) The gross proceeds derived from the sale in this state of livestock at public sales sponsored by breeders' or registry associations or livestock auction markets. When public sales of livestock are made to consumers by any person other than through a public sale sponsored by a breeders' or registry association or a livestock auction market, they are not exempted. This Section shall be construed as exempting race horses entered in races and claimed at any racing meet held in Louisiana, whether the horse claimed was owned by the original breeder or not.

            (c) Feed and feed additives for the purpose of sustaining animals which are held primarily for commercial, business, or agricultural use. The exemption provided for in this Paragraph shall not apply to the purchase of feed or feed additives for animals kept primarily for personal, sporting, or other purposes, including but not limited to purchases for pets of any kind or hunting dogs. For purposes of this Subparagraph:

            (i) "Agricultural use" means the maintaining of work animals and beasts of burden which are utilized in the activity of producing crops or animals for market, in the production of food for human consumption, in the production of animal hides or other animal products for market, or in the maintaining of breeding stock for the propagation of such agricultural use animals.

            (ii) "Business use" means the keeping and maintaining of animals which are used in performing services in conjunction with a business enterprise, such as sentry dogs and rental horses.

            (iii) "Commercial use" means the purchasing, producing, or maintaining of animals, including breeding stock, for resale.

            (d) Bait, feed, materials, supplies, equipment, fuel, and related items other than vessels used in the production or harvesting of crawfish. A person who purchases an exempt item shall claim the exemption by providing an exemption certificate at the time of purchase. Any merchant who in good faith, and after examination of the applicability of the exemption certificate to that purchase with due care, neglects or fails to collect the tax herein provided, due to the presentation by the purchaser of a tax exemption certificate issued by the Department of Revenue, including those issued pursuant to R.S. 47:305.10, shall not be liable for the payment of the tax.

            (e) Materials, supplies, equipment, fuel, bait, and related items other than vessels used in the production or harvesting of catfish. A person who purchases an exempt item shall claim the exemption by providing an exemption certificate at the time of purchase. Any merchant who in good faith, and after examination of the applicability of the exemption certificate to that purchase with due care, neglects or fails to collect the tax herein provided, due to the presentation by the purchaser of a tax exemption certificate issued by the Department of Revenue, shall not be liable for the payment of the tax.

            (f) For purposes of the sales and use tax of all taxing authorities, the "use tax," as defined herein, shall not apply to livestock and livestock products, to poultry and poultry products, to farm, range and agricultural products when produced by the farmer and used by him and members of his family.

            (g) Utilities used by commercial farmers for on-farm storage, provided that the on-farm storage facilities or containers are located in Louisiana, separately metered for utilities, and contain raw agricultural commodities, including but not limited to feed, seed, and fertilizer, to be utilized in preparing, finishing, manufacturing, or producing crops or animals prior to the first point of sale.

            (h) Pesticides used for agricultural purposes, including particularly but not by way of limitation, insecticides, herbicides and fungicides.

            (i) Purchases of feed, feed additives, seed, plants, or fertilizer by a student farmer while engaged in the scope and course of an approved agricultural project. A "student farmer" is an individual who is under the age of twenty-three and who is enrolled in any of the following:

            (i) A Future Farmers of America chapter or a program established by the National Future Farmers of America organization.

            (ii) A 4-H Club or other program established by 4-H.

            (iii) Any student agriculture program that is under the direction or guidance of an agricultural educator, advisor, or club leader.

            (j) Containers used for farm products when sold directly to the farmer.

            C. The secretary may promulgate rules and regulations designed to carry out the provisions of this Section, and any transaction not strictly in compliance with such rules and regulations shall lose the exemption provided in this Section.

            Added by Acts 1960, No. 427, §1. H.C.R. No. 55, 1986 R.S.; Acts 2003, No. 73, §1, eff. July 1, 2003; Acts 2017, No. 378, §1, eff. Jan. 1, 2018; Acts 2024, 3rd Ex. Sess., No. 11, §2, eff. Dec. 4, 2024.