Agricultural Machinery, Equipment & Supplies

Act 100 of 2016 changed the exemption around agricultural machinery and equipment. The phrase “directly and exclusively” was changed to be “predominately,” defined as 75% or more of the time the equipment is in use.

The exemption available to agricultural and horticultural entities for machinery and equipment is a use-based exemption. That means that items available under the exemption are only available as exempt if the purchaser will use the equipment 75% or more of the time for exempt uses. This declaration is made at the time of purchase by filling out Form S-3A, Agricultural Fertilizers, Pesticides, Supplies Machinery & Equipment.

For more information, please see our fact sheet on this topic, the Sales and Use Tax Regulations, and the FAQs below.

Q: How often do I need to complete a certificate?

Q: What about parts for my machinery or equipment?

Q: What does “typically used in agriculture” mean?

Q: For machinery and equipment, it must be used 75% of the time it is in use for exempt uses. What is an exempt use?

Q: There is nothing on here about fuels – isn’t that exempt if used for farm purposes?

Q: How often do I need a new form?

Q: I am an equipment dealer who sells to farmers. I’m worried that if I accept one of these exemption certificates that turns out to be incorrect I will be charged penalties and interest if I’m audited?