SUT-164 - Farmers Are Not Subject to Use Tax on Agricultural Products Given Away

When farmers give away agricultural products for free, as long as they grew or produced 50% or more of the agricultural products given away, or as long as they purchased the agricultural products directly from another farmer who grew or produced the agricultural products, no use tax is due on the agricultural products given away for free. However, if a farmer purchases agricultural products from someone other than the grower or producer of the agricultural products and no sales tax is collected at the time of the purchase, the farmer will owe use tax on the purchase price of the agricultural products it gives away for free.