N.J. Admin. Code § 18:24-19.6
Current through Register Vol. 56, No. 24, December 18, 2024
Section 18:24-19.6 - Exclusions; exceptions to exclusions(a) The exemption provided by N.J.S.A. 54:32B-8.16 does not apply to purchases of the following categories of tangible personal property, even if they are used directly and primarily in the production of agricultural or horticultural commodities for sale: 3. Materials used to construct a building or structure, with the exception of the following single-use agricultural facilities: silos, greenhouses, grain bins, and manure handling facilities.(b) The exclusion from exemption for materials used to construct a building or structure does not apply to farming equipment used directly and primarily in the production and handling and preservation of agricultural or horticultural commodities for sale, even if the equipment must be permanently affixed to an existing building or structure. Purchases of such equipment are deemed to be exempt purchases of farming equipment; they are not deemed to be purchases of materials used to construct a building or structure.(c) Examples: 1. A vegetable farmer makes the following purchases: a farm tractor used in preparing fields for planting, a commercial truck with manufacturer's gross vehicle weight rating over 18,000 pounds which the farmer registers with the Motor Vehicle Commission as a farm vehicle, and an all-terrain vehicle which is used to transport workers and farming implements to the work site. The all-terrain vehicle does not qualify for exemption; as an automobile it is excluded from the scope of the exemption. The commercial farm truck is not an automobile. The commercial truck qualifies for exemption under the commercial truck exemption N.J.S.A. 54:32B-8.43, regardless of whether it is used directly and primarily in production. The farm tractor, which is not required to be registered as a motor vehicle, is not an automobile. It is farm equipment, which is exempt when used directly and primarily in production.
2. A poultry farmer purchases animal feeders which must be permanently installed onto an existing farm building. The purchase qualifies for exemption as tangible personal property used directly and primarily in production of agricultural products for sale.
3. A farmer, who grows horticultural products for sale, in greenhouses purchases building materials which the farmer intends to use to construct a permanent addition to the greenhouse. The farmer's purchase qualifies for exemption as tangible personal property used directly and primarily in production. Because the materials will be used to construct a greenhouse, they are not the kind of building materials that are excluded from the scope of the exemption.
4. The same farmer hires a contractor to build a new greenhouse. The contractor purchases materials to construct the greenhouse for the farmer. The contractor must pay tax on the purchase of materials. The farm use exemption is available only to the farmer and does not pass through to the contractor.
5. A farmer purchases lumber and other materials to build a barn. The farmer must pay tax on the purchase of these materials. The exemption does not apply to materials used to construct a building, with certain exceptions; barns are not among the four exceptions enumerated in the statute.
6. A farmer uses electric and gas utility services directly and primarily in some production activities. The electric and gas utility services are subject to sales tax. The exemption does not apply to purchases of energy even when used directly and primarily in production.
7. A farmer purchases fuel oil and water utility services for business use and home use. Oil, water, and other fuels and utilities, except natural gas and electricity, are exempt from sales tax under N.J.S.A. 54:32B-8.7. They need not be used in farming in order to qualify for exemption, and they do not fall within the definition of energy in N.J.S.A. 54:32B-8.16.
N.J. Admin. Code § 18:24-19.6
Amended by 48 N.J.R. 824(a), effective 5/16/2016