Can a nursery operator or sod farm purchase seeds used to grow sod sold by the nursery operator or sod farm exempt from sales tax on an agricultural exemption certificate?

No. The exemption for seeds and seedlings in Tenn. Code Ann. § 67-6-207 is for seeds and seedlings from which plants will be grown to produce food or fiber for human or animal consumption.

Although sod is an agricultural product exempt from sales tax when sold by the grower or producer, sod is not normally grown to produce food for consumption by humans or animals.

A nursery operator or sod farm can register for a Tennessee sales or use tax account and obtain a
Tennessee certificate of resale upon which such seed or seedlings can be purchased exempt from
sales tax as ingredients or components of a product to be sold to others. The nursery operator or
sod farm, when completing the periodic Tennessee sales or use tax returns, will report sod sales as gross sales on Line 1 of the sales or use tax return and exempt the transactions by also reporting them on Schedule A, Line 6.

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