98-014
Response
February 17, 1998
January
27, 1998
Dear
Irene Rees,
This
letter is a request for an advisory opinion on Sales Tax for tires for Farm
vehicles.
My
name is NAME, We run a large hay
operation in Utah. We raise 800 acres of
hay and cube into 1 x 2 inch pallets called Hay Cubes. We have four of these cubing plants. We chop the hay dry and transport it from
the field to these cubing plants by wagons.
The wagons are 26' x 8 ½' and are pulled by truck tractors weighted for stability. These tractors are used only to transport
the alfalfa from field to cuber. If we
were bailing our hay we would use a bale wagon to transport from field to
stack. I feel the tires on the tractors
and wagons should be considered in the same category even though the truck
tractors is another operation would be registered and licensed. We run about 40 of these wagons and 20 or
more tractors. We are on county and
state roads going from field to field or from field to cuber approximately 20%
of the time. The tractors are never
used except in farming and farm to farm.
I would answer any questions gladly.
Thanks for your consideration.
Sincerely,
NAME
February
17, 1998
NAME
ADDRESS
CITY
STATE ZIP
Advisory
Opinion - Application of sales or use tax to purchases of tires used
exclusively on farm equipment.
We have received your request for
sales tax guidance pertaining to your purchases of tires used on tractors and
wagons used exclusively in farming operations.
We offer the following:
A sales tax exemption applies to
"sales of tangible personal property used or consumed primarily and
directly in farming operations" unless the item is used in a manner that
is only incidental or peripheral to the farming operation. Utah Code Ann. §59-12-104 (21). This exemption applies to sales of equipment
used directly in farm production and not for peripheral activities such as
distribution, processing or transportation of farm products to market. This exemption does not apply to vehicles
which are required to be registered in this state.
For purposes of this opinion, we
assume that the tractors and wagons are not required to be registered. From your description, we also assume that
they are used exclusively and directly in your farming operations. Therefore, purchases of the tires are exempt
from sales and use tax.
Please let us know if you have
further questions.
For
the Commission,
Joe
B. Pacheco,
Commissioner
^^