Missouri Sales Tax Exemption for Agriculture

The Missouri sales tax exemption for agriculture provides a sales & use tax exemption for Missouri-based businesses involved in an agricultural production process like producing crops or raising and feeding livestock or poultry for sale at retail. The knowledgeable and detail-oriented sales tax consultants at the Agile Consulting Group can provide your organization with the resources and tools to take advantage of this exemption and improve your business’s cash flow.

In general, per MO Code Regs. 10-110.900, “the purchase of farm machinery, equipment, and repair and replacement parts and supplies and lubricants used exclusively, solely, and directly for producing crops, raising and feeding livestock, fish, or poultry, or producing milk for ultimate sale at retail, and motor fuel used for agricultural purposes is exempt from tax.” To qualify for this exemption, the machinery, equipment, repair and replacement parts, and supplies must meet the following three criteria:

1. Used exclusively for agricultural purposes
2. Used on land owned or leased for the purpose of producing farm products; and
3. Used directly in producing farm products to be sold ultimately in processed form or otherwise at retail or in producing farm products to be fed to livestock or poultry to be sold ultimately in processed form at retail.

One of the key determinants for this Missouri sales tax exemption for agriculture is whether the purchase is “used directly” in the agricultural production process. For the purposes of this exemption, “used directly” could encompass items that are used in pre-production, during production, or post-production, depending on three factors:

1. Where the item in question is used
2. When the item in question is used
3. How the item in question is used

Since there are several factors involved in determining whether an item is considered to be “used directly” in agricultural production, it is important to review each item in detail to ensure that it qualifies for the sales tax exemption.

Machinery & Equipment that Qualify for the Exemption

The following is a non-exhaustive list of the types of machinery & equipment that would qualify for the Missouri sales tax exemption for agriculture:

• Anhydrous ammonia applicators, nurse tanks and toolbars
• Balers
• Combines
• Drag conveyors
• Fertilizer spreaders & sprayers
• Grain augers, binders, conveyors, and handling equipment
• Irrigation equipment
• Seeders
• Tractors

MO Code Regs. 10-110.900(4)(A) provides a more comprehensive listing of the items that qualify under this exemption. MO Code Regs. 10-110.900(4)(B) also references the types of items that are taxable and do not qualify for this exemption.

How to Claim the Missouri Sales Tax Exemption for Agriculture

In order to claim the Missouri sales tax exemption for agriculture, qualifying agricultural producers must fully complete a Missouri Form 149 Sales and Use Tax Exemption Certificate and furnish this completed form to their sellers.

How to Recover Missouri Sales Taxes Already Paid to a Seller

Missouri agricultural producers that have already made purchases which meet the exemption criteria listed above are entitled to refunds for purchases that were made within three years from the date the tax was paid. Missouri agricultural producers are eligible to recover any sales tax overpayments on machinery, equipment, repair & replacement parts and supplies used in agricultural production by submitting a Missouri Form 472P with the Missouri Department of Revenue. This Missouri Form 472P Purchaser’s Claim for Sales Tax Refund must be filed with the appropriate documentation in order for the Missouri Department of Revenue to consider the claim valid. Some of the required documentation includes a signed & notarized Missouri Form 5433 from the seller, a detailed worksheet explaining how each item is used during agricultural production, and invoice copies. The consultants at Agile Consulting Group have experience in recovering overpaid sales taxes from the Missouri Department of Revenue and can assist any Missouri agricultural producer with this cumbersome process.

As with all sales and use tax research, the specifics of each case need to be considered when determining taxability. Additional advice from Agile Consulting Group’s sales tax consulting team can be found on our page summarizing Missouri sales and use tax exemptions.

Reach Out to Us with Questions

If you have questions, comments or would like to discuss the specific circumstances you are encountering in regard to this issue or any other sales and use tax issue, please contact a member of Agile Consulting Group’s sales tax consulting team at (888) 350-4TAX (4829) or via email at info@salesandusetax.com.

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