Overview

Farm operations are exempt from paying sales tax on items used in the farming operation. None of the exemptions are automatic. You must either present an exemption certificate to the vendor when purchasing products or you can claim a refund if you have evidence to show you paid the sales tax. Forms are available on the State Dept. of Taxation and Finance website listed below. Some of the more common forms applicable to farms include the ST-125 Farmer’s and Commercial Horse Boarding Operator’s Exemption Certificate, found here: www.tax.ny.gov/pdf/current_forms/st/st125.pdf

This form exempts you from paying sales tax on the purchase of tangible personal property used predominantly (more than 50%) in farm production or horse boarding. This includes:

• Building materials
• Production equipment and supplies
• Animals
• Feed
• Hardware
• Motor vehicles
• Fuel (not motor fuel)
• Gas/propane
• Electricity
• Refrigeration
• Labor and services hired for repairing, maintaining or servicing property used in farming

There are many subtle exemptions so it pays to check with the State if you are uncertain about whether an item or service you are purchasing is exempt from sales tax (and if the seller is unsure).

Copies of this form are available on the website in the margin or by calling your county extension office. Make sure you have copies of the form (ST-125) with you when making purchases. If you make numerous purchases with a particular supplier, check the box “blanket certificate” and the vendor can keep the form on file for future purchases. Page 2 of the form gives the tax department definitions of Farm Production, Farming, Predominantly, and Commercial Horse Boarding Operation.