How to become Ag Exempt in Texas!

One of the most mutual questions I am asked here in Parker County is:  "Is this ranch state ag exempt?"  If the answer is no, the follow up is, "How do I get Ag Exempt?"

Who Qualifies for Agricultural and Timber Exemptions?

  • If yous are a farmer, rancher or timber producer engaged in one of the activities listed below, you authorize for tax exemption on the purchase of certain items used to produce your agricultural and timber products for auction.

  • All purchasers, including non-Texas residents, must have a valid agricultural and timber registration number (ag/timber number) issued by the Comptroller to claim exemption from Texas revenue enhancement.

  • If you exercise not accept a valid ag/timber number, you lot must pay tax to retailers on your purchases.

  • Your business type must be listed beneath to authorize for revenue enhancement exemption on certain items or for an ag/timber number.

Which Activities Authorize?

  • farming or ranching for the purpose of raising agronomical products for sale;

  • timber production (including contract logging);

  • feedlot functioning;

  • commercial fish farm operation;

  • bee keeping;

  • custom harvesting;

  • crop dusting (every bit defined by 14 CFR Department 137.3);

  • growing plants for sale in a commercial plant nursery;

  • a veterinary business that makes farm or ranch calls;

  • Future Farmers of America or 4-H; or

  • teaching an agricultural vocational class.

Which Activities practice Not Qualify?

  • home gardening;

  • horse racing, boarding, grooming or trail rides;

  • rodeos, circuses or zoos;

  • florists or like retailers who maintain plants before sale;

  • wild fauna direction and conservation;

  • hunting and line-fishing operations, including aerial hunting;

  • predator command;

  • wildlife or livestock surveys;

  • commercial line-fishing;

  • companion animate being (pet) breeding; and

  • kennels or other animal boarding businesses.

I breed and sell horses. Do I authorize for an ag/timber number to purchase eligible items tax free?

  • Yeah. Persons who breed and sell horses in the regular course of business (including continuing studs or using alive encompass, shipped semen or artificial insemination) authorize for an ag/timber number. Equipment used exclusively on the farm or ranch to produce horses for sale can be purchased revenue enhancement free.

My family unit does team penning and I rope, but I don't routinely sell my horses. Practise I authorize for an ag/timber number to purchase eligible items revenue enhancement gratuitous?

  • No. To qualify, persons must produce horses for sale in the regular class of business organization. The horses themselves and horse feed (including grain, hay and feed supplements) can be purchased taxation free without an ag/timber number or an exemption certificate.

I lease my state to a person who raises cattle for sale. The cattle graze on this land, and my lease understanding states that I am responsible for providing grass for the cattle. Practise I qualify for an ag/timber number?

  • Yep. Because your contract requires you to provide grass for the cattle, you can obtain an ag/timber number and utilize it to purchase tax-complimentary those items used exclusively to produce the grass.

I raise cattle for sale. Because of the drought, I was forced to sell my entire herd earlier this year. As a result, I am not actively engaged in the production of agricultural products for auction right at present, but will begin over again every bit soon equally the drought is over. Do I authorize for an ag/timber number?

  • Aye, since your ordinary class of business is the production of agronomical products for sale, you lot are eligible for an ag/timber number. You can apply the number to claim an exemption on items that volition exist used exclusively to maintain or ready the state for commercial agricultural production.

How practise I utilise for an Ag Exemption, or an Ag/Timber Number?

What You Need Before Y'all Employ

  • Basic information about your business (such as its name, description and address)

  • Social Security number (if yous practice not qualify for a Social Security number, you must apply by mail and include your national identification number and country of origin on the awarding)

  • If your business is registered with the Texas Secretary of Country (SOS), your SOS file number (observe your file number using our Taxable Entity Search)

Apply Online

  • If you don't already take an eSystems/Webfile account with the country of Texas, you will first register to create a secure online profile. Otherwise, log on every bit a returning user. The application takes about 10 minutes to complete. No signature is required, and they will issue your ag/timber number at the terminate of the application process.

  • They volition mail you a confirmation alphabetic character in 5 to 7 business days after you complete the online awarding. In the meantime, you can view and print a copy of your confirmation letter of the alphabet (using Adobe Acrobat Reader) upon completing the registration process, or write down your ag/timber number. You can also look up your registration information at whatsoever time.

Use on Paper

  • Yous can print the awarding (PDF) and postal service the paper version to united states of america. Allow 3 to 4 weeks for processing time.

  • Additionally, you can call our Fax on Need service at ane-800-531-1441, or telephone call one-800-252-5555 to ask for an awarding to be mailed to you.

Land qualifies for special appraisal (ane-d-one appraisal) if it has been (1) used for agriculture for five of the preceding seven years and is currently devoted principally to agricultural use every bit defined by statute, (2) used to protect federally listed endangered species under a federal permit, or (three) used for conservation or restitution projects under certain federal and state statutes. The country must also be used for agronomics to the degree of intensity generally accepted in the expanse. The value of the land is based on the annual net income from a typical lease arrangement that would have been earned from the country during the 5-year period preceding the year before the appointment of appraisal past an owner using ordinary prudence in the management of the country and the subcontract crops and livestock produced or supported on the state, including income received from hunting or recreational leases.

Under Commodity 8, section 1-D-i, the possessor of the land does not have to make their living off of the land, and their chief occupation does not have to be farming or ranching. The Tax Code defines agronomics every bit: "cultivating the soil, producing crops for man food, animal feed or planting seed or for the production of fibers; floriculture, viticulture, and horticulture; raising or keeping livestock; raising or keeping exotic animals for the product of homo food or of fiber, leather, pelts, or other tangible products having a commercial value; and planting cover crops or leaving land idle for the purpose of participating in any governmental program or normal ingather or livestock rotation procedure and wildlife management." Some activities that would not qualify include, harvesting native plants, hunting native wild fauna such equally deer or turkey, and processing activities that take place after the crop or animal has been harvested such as slaughter operations or cotton ginning.

In that location are minimum numbers of boilerplate and amount of agricultural produce required to qualify as well. Properties with less than x acres generally will not qualify. Depending on the county, you may need one animate being unit per 5-10 acres of improved land, and the fauna units are as follows (for Wise County, and these requirements are like in the surrounding counties.  Delight call your local taxation assessors office for your county's specific requirements):
      i    -  Cow & Calf = i creature unit
      1 Balderdash = ane ½ brute unit
      1 Horse = 1 animal unit
      6 Sheep or goats = 1 animal unit of measurement
      2 Miniature horses or donkeys = 1 animal unit
      Chickens and Pigs can qualify depending on how they are beingness used.

If you would like more information on how I tin can help you market place and sell your habitation, please contact me!  Heather Kingston, REALTOR, The Cates Group, 817-771-1360

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