Farmers, nurserymen, and timber harvesters may purchase, tax exempt, dyed diesel fuel for off-road agricultural use in farm machinery and timber harvesting equipment. The farmer must present its agricultural sales and use tax exemption certificate issued by the Department of Revenue in order to receive the exemption on its purchase. The dealer may maintain a copy of the certificate on file instead of requiring the farmer to present an exemption certificate for each purchase. The dealer is still required to prepare and retain a sales invoice to document each transaction. Dealers who do not maintain sales invoices may be held liable for the sales tax on the undocumented sales of dyed diesel fuel.
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