Tennessee Farmers Can Buy More Tax Free in 2023

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NASHVILLE – The Tennessee Department of Revenue and the Tennessee Department of Agriculture remind farmers, timber harvesters, and nursery operators that they can buy more items tax-free in 2023.

Under a new state law taking effect January 1, 2023, qualified farmers and nursery operators may purchase building material, fencing material, warranties, and most other items of tangible personal property used primarily in agricultural operations exempt from sales and use tax.

“Farming is an important industry in our state, and we were pleased to work with the Tennessee Department of Agriculture, members of the Tennessee General Assembly, and other stakeholders to expand the agricultural sales tax exemption,” Revenue Commissioner David Gerregano said.

“The new tax exemptions will greatly benefit Tennessee’s farmers and foresters when purchasing what they need for their operations to thrive,” Agriculture Commissioner Charlie Hatcher, D.V.M. said. “As Tennessee’s number one industry, when agriculture is strong, everyone benefits. We appreciate our policymakers for recognizing the importance and impact of ag.”

To purchase farm equipment and machinery tax-free, farmers must show their Tennessee sales tax exemption card. To obtain a card, famers should complete the Agricultural Sales and Use Tax Exemption application.

Automobiles, trucks, household appliances, and gasoline or diesel fuel used in vehicles operated upon public highways remain subject to sales tax. Additionally, contractors and subcontractors who use property in the performance of a contract with a qualified farmer or nursery operator are subject to sales and use tax on that property.

For more information about the agricultural sales tax exemption, read this important notice and this tax manual on the Department of Revenue’s website. For questions, please call 615-253-0600 or email [email protected].

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws and the collection of taxes and fees associated with those laws. The department collects around 87 percent of total state revenue. During the 2022 fiscal year, it collected nearly $20.9 billion in state taxes and fees and more than $4.3 billion in taxes and fees for local governments. To learn more about the department, visit www.tn.gov/revenue.

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