The sales and use tax law exempts sales of livestock and poultry, nursery stock, farm, and nursery
products sold by the grower/producer from sales tax. Thus any portion of your annual sales that are these types of products you have grown or raised is exempt from sales tax. If these agricultural products raised or produced by the farmer constitute at least 50% of all sales of livestock and poultry, nursery stock, farm and nursery products for the entire year, all of the farmer’s sales of these types of products made during the year are exempt from sales tax. If these types of products raised or produced by the farmer constitute less than 50% of all sales of these products for the entire year, the portion raised by the farmer are exempt but the portion obtained from other sources and sold by the farmer are subject to sales tax.
In considering the questions about the pumpkins, we do not know how much farm product was sold for the entire year and what portion was actually grown by the farmer. We are only given
information about these particular pumpkin sales. To provide a response, we will assume (for
Questions 59 and 60) that the only sales made by the grower for the entire year are the sales of
If you produce 50% or more of the total pumpkins sold, then none of the sales of the pumpkins are subject to the sales tax. However, if you sold $800 of your own pumpkins and $1,200 worth of
pumpkins produced by Farmer Jones, the sales of the $1,200 worth of pumpkins produced by
Farmer Jones and sold by you are taxable. Sales of the $800 worth of pumpkins grown by you
remain exempt from tax. Record keeping is required to confirm the separation.