Any machinery used exclusively (100% of the time) in the harvesting of timber is considered qualified agricultural equipment and would be exempt from sales and use tax. Any subsequent repair labor and repair or replacement parts for such qualifying equipment (e.g., chains, cables, fasteners, nuts, bolts, and shear pins), when sold to a qualified timber harvester that has been issued an agricultural exemption certificate, are also exempt from sales and use tax.
Examples include chainsaws, log skidders, bulldozers used in a qualified manner, and equipment used to load the logs onto trucks and trailers (e.g., claw lifts and installation of such lifts). In addition, the agricultural exemption for trailers includes trailers used to transport harvested timber over the road to the sawmill or market (e.g., semi-trailer).
Note that a chainsaw that is used to cut firewood, or for other unqualified uses, by a farmer does not qualify as exempt machinery used directly and principally to produce agricultural products. In addition, trucks are specifically excluded from the agricultural exemption.
Reference: Important Notice 07-13 and 19-09.