Connecticut State Department of Revenue Services

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LSN-101

This information is not current and is being provided for reference purposes only

LS-101

Revised Special Notice Concerning Farmer Tax Exemptions Permits

This LSN is cited in Ruling 91-23; modified and superseded by PS 91(7)

Effective October 1, 1989, retail sales of tangible personal property to be used exclusively in agricultural production are exempt from sales and use taxes if made to a person who:

  • has been issued a Farmer Tax Exemption Permit (Form OR-248) by the Department of Revenue Services and
  • gives a copy of the permit to the retailer at the time of sale.

This exemption replaces the former exemption from sales and use taxes for sales of machinery, materials, tools and fuel used directly in agricultural production which was valid only until December 1, 1989.

This exemption applies only to the sale of tangible personal property to persons issued a Farmer Tax Exemption Permit and does not apply to the sales of services to those persons.

A Farmer Tax Exemption Permit will be issued to a person who meets all three of the following conditions:

  • The person is engaged in agricultural production as a trade or business. To be engaged in agricultural production as a trade or business, a person must both be engaged with a profit motive, and materially participate, in such production. Agricultural production means engaging, as a trade or business, in the raising and harvesting of any agricultural or horticultural commodity, dairy farming, forestry, the raising of livestock including horses, bees, poultry, fur-bearing animals or wildlife, the raising and harvesting of molluscan shellfish or the operation of a farm and its building.
  • The person has in the preceding calendar year gross income of $2500 from the sales of agricultural products produced in agricultural production, including livestock, produce, grains and other products raised for sale, as reported for federal income tax purposes.
  • For individuals, partnerships, and fiduciaries such income will generally be reported on Schedule F of the Internal Revenue Services Form 1040, 1041, or 1065.
  • Cash basis taxpayers will report such income on Lines 1 and 4. Accrual basis taxpayers will report such income on Line 38.
  • For C-Corporations such income will generally be reported on Form 1120 or 1120A, Line 1c.
  • For S-Corporations such income will generally be reported on Form 1120S, Line 1c
  • The person files a completed Application for Farmer Tax Exemption Permit (Form REG-8) with a copy of the appropriate form cited above. (Those who are not calendar year taxpayers must also provide information pertaining to calendar year 1989.) The enclosed Application for Farmer Tax Exemption Permit (Form REG-8) is the only official form that the Department will accept.

While an Application for Farmer Tax Exemption Permit (Form REG-8) may be filed at any time, the permit will be valid only from the date of issuance until the following September 30th.

A copy of the Farmer Tax Exemption Permit should be given to each retailer in order to make a continuing line of exempt purchases until the following September 30th when the Farmer Tax Exemption Permit expires. Failure to present a valid permit will result in a taxable sale. Please be advised, there is no provision for the refund of the sales and use tax to those who do not present a valid Farmer Tax Exemption Permit at the time of sale.

LSN-101 (Rev. 5/90)