I used to be a Sales Tax Auditor for the State of Maryland. Here is the tax law for Maryland on Tractors. If you guys have any questions regarding sales tax in Maryland, send me a PM I would be glad to answer them for you.
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 is treated as personal property entitled to sales and use tax exemption 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 Comptrollerç—´ 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. See a sample certification statement. Even if a certification is provided, a vendor must, however, 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 realty and items for personal use are taxable.
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. Sales of flowers, sod, decorative trees, shrubs and any other product usually sold by a nursery or horticulturist do not qualify for this exemption
