Texas ag exemption and farm tax exemptions at the counter

It is 7:40 on a Saturday morning in April, and a farmer you know by his first name has three bags of cattle feed, a jug of pasture herbicide, and a bag of dog food parked in front of your register. He pulls out his wallet and asks the question every farm store clerk hears sooner or later: "You've got my ag number on file, right?" What you do in the next thirty seconds matters more than it looks, because the exemption belongs to the farmer, but the audit risk belongs to you. If the state ever comes asking why that ticket went out untaxed, the farmer is not the one answering the letter. Getting it right comes down to three habits: collect the right document before the sale, exempt the item rather than the person, and keep a paper trail that ties every untaxed line back to a valid certificate.

How an agricultural sales tax exemption works at the register

The mechanics rhyme from state to state, even though the forms differ. The farmer registers with the state, the state issues a number, a card, or a certificate, and the farmer hands you a copy or fills out a form for your file. That document is your justification for every line you do not charge tax on, and without it an untaxed sale is tax you owed and did not collect. Kentucky puts it in writing on its Farm Exemption Certificate: "Sellers failing to obtain a completed certificate will be held liable for the sales and use tax."

So when a new farmer wants the exemption, your job is friendly and firm: get the document, file it, and sell on. If a farmer asks how to get a farm tax exemption in the first place, the answer is that they apply with the state agency listed in the table below, and you can point them to the right page. Remember, too, that you are allowed to say no. In Texas, retailers are not required to accept an exemption certificate, and the Comptroller says to refuse one for clearly non-qualifying items like jewelry or furniture.

The ag exemption is also a different animal from the resale certificate your contractor customers hand over when they buy material for a job. If you sell to both crowds, our companion guide on resale and tax exemption certificates for contractors covers that side of the counter.

What qualifies, and what doesn't

Most states draw the line at production agriculture: what a farmer buys to grow a crop or raise livestock is commonly exempt, while what goes to the house, the garden, and the family dog is commonly taxable. Kansas spells it out about as plainly as anyone in its ST-28F instructions, where exempt items include "wheat, corn, milo, soybean, sunflower seed used to produce these crops; feed for beef or dairy cattle, sheep, and hogs," and taxable items include "bedding plants and seeds for a home garden; or food for pets and pleasure animals." North Carolina's list reads much the same, covering "farm machinery, attachment and repair parts for farm machinery, fertilizer, feed, seeds, and livestock" bought by qualifying farmers for use "primarily in farming operations."

The dog food is the classic trap, and states are not subtle about it. Texas says flatly that "pet food is taxable," and Kansas adds that "food, vitamins and minerals for a pet or pleasure animal are taxable." Your customer can be a legitimate farmer with a legitimate exemption number and still owe tax on the kibble, because what matters is what the item is and what it is for.

Texas: the Ag/Timber Number and Form 01-924

Texas gets its own section because so many farm and feed stores operate there and because the system is well documented. The short version, from the Texas Comptroller, is that "all purchasers, including non-Texas residents, must have a valid agricultural and timber registration number (Ag/Timber Number) issued by the Comptroller's office to claim exemption from Texas tax." The farmer writes that number on Form 01-924, the Texas Agricultural Sales and Use Tax Exemption Certification, and hands it to you.

There is a useful wrinkle for feed stores. Some farm staples are exempt for everyone, no number required, including "seeds and annual plants, the products of which are commonly recognized as food for humans or animals" and "feed for farm animals, ranch animals and wild game, including oats, hay, chicken scratch, wild bird seed and deer corn." The items that do need the certificate and number are the other farm inputs: fertilizers, fungicides, insecticides, herbicides, farm and timber machinery and equipment with their repair parts, and irrigation system components.

Two dates belong on your calendar. Ag/Timber Numbers renew every four years, and new and renewed numbers issued in 2023 are good until December 2027, so a renewal wave is coming. In the meantime you can check any number with the Comptroller's Ag/Timber Number lookup before you accept it. Not every rural pursuit qualifies, either: horse racing, boarding, training or trail rides, rodeos, and companion animal (pet) breeding are all non-qualifying activities, so the boarding stable down the road pays tax like everyone else.

Texas also allows a blanket certificate: "When a seller sells taxable items and items that can qualify for the agricultural exemption, the seller can obtain a single 'blanket' agricultural exemption certificate from the farmer or rancher when the first purchase is made." Later exempt invoices get stamped "Exempt agricultural purposes" with the customer's number and signature. Blanket here means one certificate on file, not a free pass for the whole ticket, and the mixed-ticket section below explains why that distinction matters.

Farm exemption forms in ten major farm states

Every state runs its own program, so resist the urge to generalize from the one you know. Here is what farmers hand you in ten major farm states, with the official page linked so you can read the fine print yourself.

Rules as of September 2026; check the linked page before you rely on a row.

Mixed tickets: exempt feed and taxable dog food on one sale

Back to our Saturday morning farmer, because his ticket is the whole ballgame. In Texas the cattle feed is exempt without a number, the pasture herbicide rides his Ag/Timber Number, and the dog food is taxed no matter what is on file, so one farmer on one visit gets three different answers on one receipt.

That is why a customer-level blanket exemption is the wrong tool for a farmer. If your system marks the whole customer as tax exempt, every line on every ticket goes out untaxed, including the dog food, the work gloves, and the cooler he grabbed on the way to the register, and that under-collected tax sits in your books waiting for an auditor to find it. The right model is line-level taxability, where the product carries its own tax status and the farmer's certificate covers only the items that qualify. Blanket treatment suits organizations such as schools, churches, and government agencies, where the whole purchase is exempt; for a farm customer, exempt the item, not the person.

Record-keeping and audits

Here is the part nobody enjoys and everybody needs. When your state audits your sales tax filings, the examiner pulls a sample of untaxed sales and asks you to produce the certificate behind each one, and the states are clear about what they expect. Kentucky relieves the seller "only if he maintains a file of these certificates for a period of not less than four years as provided by KRS 139.720." Kansas tells sellers to keep completed certificates "for at least three years from the date of sale." Iowa's instructions add a timing rule, since the certificate "must be completed and be in effect within 90 days of the date of sale," and the seller keeps it "as proof that the exemption was properly claimed." Tennessee wants the document on file plus "the buyer's name, address, and description of tax-exempt purchases for each invoice," and Texas says a retailer "must be able to match the stamped invoices to the purchaser's exemption certificate."

Two habits save you here. The first is watching expirations: Texas numbers expire December 31, 2027, Oklahoma permits run three years, and Georgia GATE certificates run three years with the wallet card reissued each calendar year, so an expired number on file is as good as no number at all. The second is a policy for the "I'll bring my number next week" customer. Our advice is to collect the tax until the certificate is in hand and then handle any refund the way your state's rules allow, because tax you collected and later return is a much smaller problem than tax you never collected and now owe.

How Rundoo handles ag exemptions

Rundoo is built around the line-level model, because that is how farm stores sell. The product carries the tax status and the customer carries the number: you mark feed as ag exempt (Rundoo calls it single-use non-taxable), put the farmer's ag exemption number in the single-use field on the account, and the feed rings exempt while the cat food on the same ticket is taxed. A blanket exemption number, by contrast, exempts everything on the ticket, so it belongs to schools, churches, and government accounts rather than farms. And a price tier is not a certificate: same tier, same bag, opposite result, depending on whether a valid exemption stands behind the sale.

For the paper trail, you can attach a scan or a phone photo of the certificate to the customer's file, so it is on hand when an auditor asks. One Texas ag customer told us nearly all of its sales go out under farmers' ag numbers, so it keeps every customer's Ag/Timber Number on the customer profile, and a Georgia feed store told us many local farmers carry GATE cards that the account has to reflect at checkout. One limit worth knowing up front is that Rundoo records the number but does not check it against the state's database, so verification stays with you, using the state lookups linked above.

When it is time to file, Rundoo's tax report shows taxable revenue, non-taxable revenue, and tax owed by jurisdiction, and you can ask Dooey to pull last month's tax-exempt transactions instead of hunting through reports. If you are moving off an older system, customers' tax-exempt IDs migrate as part of standard onboarding and get checked again on go-live morning. One Texas feed store we moved over had kept its farmers' ag numbers in a notes field, where software cannot tell an exemption number from a reminder about somebody's horse, so each one had to be confirmed and moved into a field that does some work. For the rest of what a farm and feed store POS should handle, from charge accounts and seasonal terms to what separates the best POS for farm and feed stores, we have written about all of it.

Tax-exempt, it turns out, does not mean paperwork-exempt. If you collect the document before the sale, exempt the item instead of the person, and keep a trail that ties every untaxed line to a certificate, the next audit letter becomes a filing exercise instead of a bill, the farmer gets his feed untaxed, the dog food gets taxed like it should, and everybody goes home before the coffee gets cold.