BULLETIN NO. 018 - Issued April 2000
Replaces 85-18 Issued November 1993

Section 1 - GENERAL INFORMATION

• The exemptions for farm-use equipment apply to farmers as well as to those who provide contract farming services (e.g., custom crop spraying, drainage works, etc.).
• Farming means the growing of field crops, primary production of food and raising of livestock on farmland for commercial sale. Farming also includes beekeeping, mink ranching, mushroom growing, harvesting wild rice, sod growing, tree nursery/green house, poultry hatching and raising of fish for sale as food.
• Exempt items used principally for farming fall into the following categories:
  • Those that may be taxable when used in operations other than farming, but when used principally for farming qualify for the farm exemption. A "Farm-Use Certificate" as described below must be obtained by the vendor when selling these items (see List "A").
  • Those that are readily identifiable as farm-use equipment and generally have no other application. Vendors are not required to obtain a "Farm-Use Certificate" on sales of those items (see List "B").
• See List "C" for those items that are always taxable at the time of sale.
• See List "D" for items that are generally used for non-farming purposes but may in some cases be used principally for farming. In this case the farmer must pay the tax to the vendor at the time of purchase, but may be eligible for a tax refund upon review by the Taxation Division.

• Farm equipment is considered to be "principally for farming" if it is used at least 80 per cent for farming purposes during the 24 month period after purchase. Equipment used more than 20 per cent for non-farming purposes during the first 24 months after purchase is subject to tax on the full purchase price.

Example 1: A farmer purchased a tractor and used it 10 per cent of the time to mow grass for a municipality on their road allowances and 90 per cent for grain farming. In this case the tractor qualifies for the farming exemption.

• Where a vendor is required to obtain a Farm-Use Certificate at the time of selling equipment purchased "principally for farming" (see list "A"), it must be in the following form :

"I hereby certify that the goods shown on this invoice are farm implements, farm machinery or repair parts therefor, and will be used principally for farming.

Section 2 - EXEMPTION FOR EQUIPMENT PURCHASED PRINCIPALLY FOR FARMING

• Aeration equipment specifically designed for storing grain, potatoes or other farm crops.
• Aircraft that are specifically designed and licensed for farm spraying and are used principally for that purpose.
• Antibiotic test kits used to test cow's milk.
• Barn cleaning equipment including high pressure washers.
• Batteries, tires and tubes specifically designed for use in farm machinery. This exemption is not allowed on batteries, tires and tubes that can be used for a truck or car.
• Bird scare cannons.
• Boxes for farm trailers or wagons. This exemption is not allowed on boxes for trucks required to be licensed under The Highway Traffic Act.
• Branding irons.
• Calcium chloride for tractor tires.
• Chemical applicators for the care of livestock.
• Containers for dead animal pick up.
• Containers for farm produce including barrels, drums, boxes, crates, cartons, sacks, milk cans and pails.
• Coverings specifically designed for exempt farm machinery.
• Crawler tractors and six-wheel drive tractors for farm use.
• Drugs and medicines for the purpose of diagnosis, treatment, mitigation or prevention of disease in livestock that are used directly in a farming operation. (For additional information see Bulletin - Drugs and Medicaments for Farm Use.)
• Egg candlers, graders and washers.
• Electrical generators, (heavy duty) used exclusively in farm production. But lighting plants, generators and emergency power transfer switches used on a farm site for domestic use are taxable.
• Electric power converters used exclusively for the operation of grain dryers or other farm equipment.
• Farm fencing for livestock and poultry including barbed wire, fence posts, staples, electric fence equipment and other materials that are designed for farm fencing, but not including general purpose lumber (see List "D" for exception).
• Farm tractors of 16 H.P. and over.
• Farm tractor cabs.
• Farm trailers and wagons that are not required to be licensed under The Highway Traffic Act.
• Field drainage tiles and related materials.
• Filters for exempt farm equipment (gas, oil and air filters).
• Front-end loaders, blades and forklifts for farm tractors of 16 H.P. and over.
• Grain handling equipment including dryers, cleaners, augers and conveyers.
• Grain shovels, forks and related items. This exemption is not allowed on shop tools, hand tools or shop equipment.
• Granaries purchased by a farmer that are designed and used exclusively for storage of grain. (See Bulletin No. 021 - Granaries and Farm Storage Buildings.)
• Global Positioning Systems (GPS) equipment used directly for farming operations, e.g. aerial crop spraying.
• Haystack covers including related weights and rope.
• Heaters, radios and air conditioning equipment that are specifically designed for farm tractors or other farm machinery. If not specifically designed, they must be already installed when the exempt farm tractor or other farm machinery is purchased.
• Heating systems, where at least 80 per cent of the system is used specifically for the caring of livestock or growing of plants for sale. Where a portion of the system (but not more than 20 per cent) is used to heat other space on the farm such as an equipment shed, office or farm home, the materials such as ducting, piping, valves, etc. acquired to provide heat to these areas are taxable. Where a central heating system is used more than 20 per cent for the heating system of non-farming space, the entire system is taxable.
• Hoists including power take-offs for farm trucks.
• Horse harness.
• Hydraulic oil for exempt farm equipment.
• Hydroponic forage units.
• Installation of exempt farm machinery, including labour to install electricity for the machinery. Please note: Electrical supplies and materials used to provide electricity to farm machinery are taxable.
• Irrigation equipment but not materials used to provide an electric supply line to the irrigation site (also see "water supply systems" in this bulletin).
• Manure slurry tanks or liners for manure lagoons (exemption expires December 31, 2000).
• Moisture meters, temperature probes and sample probes for handling and storing grain and vegetable crops.
• Monitoring devices used in the care of livestock, such as a video scanner installed in a birthing room.
• Motors for exempt farm machinery (electric motors, gas or combustion engines).
• Mowers and tillers for farm tractors of 16 H.P. and over.
• Pasteurizers.
• Post hole augers used for farm fencing.
• Potato graders, washers, seed cutting machines, mobile potato boxes (except truck boxes), pallets, bin loader piler, flumes and other ventilating equipment for potatoes when used directly in the operation of potato growing. (But ventilation flumes that are poured as part of the concrete floor do not qualify for the exemption.)
• Propane tanks used exclusively for grain drying.
• Pumps, pipes, valves and fittings for water supply to farm production, pumps used to keep water supply dugouts from freezing.
• Refrigeration equipment purchased for use in the storage of fruit and vegetables and other farm products grown commercially for sale.
• Repair and installation services to exempt farm equipment (also see "installation" listed above).
• Repair parts or replacement parts for farm equipment. This includes nuts, bolts, screws and other fasteners that a farmer uses to replace parts on farm equipment, but not when purchased for other miscellaneous uses.
• Replacement parts custom manufactured (by a supplier of steel and other materials) to specifications of the original farm equipment part, i.e. the steel is cut, shaped, welded, drilled, etc. to duplicate the original part. For these items the supplier must clearly describe the manufactured part on the invoice. Tax is payable on steel and other materials purchased by farmers for general purpose uses, including steel that has simply been cut to length by the supplier. (See List "D" for parts manufactured by farmers.)
• Safety accessories that are required under The Highway Traffic Act and are designed exclusively for installation on farm machinery, e.g. clearance lights.
• Scales for weighing farm produce.
• Snow blowers designed to be mounted on farm tractors of 16 H.P. and over.
• Soil testers.
• Spraying or spreading equipment for fertilizers, insecticides or weed control chemicals including crop sprayers for all-terrain vehicles.
• Tanks and containers that are designed to be attached or pulled behind a fertilizer, insecticide, weed control sprayer or other exempt farm equipment. Portable tanks specifically designed to haul fertilizer, chemicals or water to the field sprayer are exempt when purchased by a farmer.
• Temperature alarm systems used in caring of livestock.
• Ventilation fans, dust collectors and dust filters for buildings that are used for confining livestock and poultry or for the storage of crops.
• Veterinary equipment purchased for the farmer's own use in the care of livestock.
• Water supply systems bought for farm production (e.g. for use in watering livestock, spraying and irrigating crops).
  • If the well is used mainly for farm production and is set up as a watering system with underground piping out to the farm production areas, the well casing and pump, as well as the underground piping and pipe accessories leading to the production areas, are exempt from the tax. However, the pipe and plumbing fixtures which serve the farmhouse are taxable.
  • If the well is for a water pressure system intended mainly for household use, (even if there is water taps or hose connections placed on the outside of the house or at the wellhead) all of the fixtures, piping and other materials are taxable.
• Weed burners.
• Welding rods.
• Wood chips and shavings used in the care of livestock.

• Agricultural feeds.
• Agricultural lime, peat moss, top soil and loam.
• Animals or animal products that ordinarily constitute food or drink for human consumption.
• Barn pens, stalls and stanchions.
• Binder twine, baler twine and baling wire.
• Bluestone purchased for adding to water in a dugout.
• Cattle chutes, oilers and squeezes.
• Combines.
• Cow trainers.
• Cream separators.
• Cultivators.
• Discs.
• Farm horses, including horses for cattle ranching, raising of horses for sale, horses used in production of estrogen and race horses.
• Farrowing crates and pens.
• Feed grinders, crushers, rollers, mills and mixers used by farmers for processing feed for their livestock.
• Fertilizers, insecticides, fungicides, rodenticides and weed control chemicals. However, surficants, defoamers and wetting agents, when purchased separately, are not exempt.
• Forage harvesters.
• Harrows (chain, disc or tooth).
• Haying equipment designed for farm use including mowers, loaders, presses, balers, rakes, sweeps and stack movers.
• Livestock feeders, waterers; and other equipment designed for use in the production, handling, feeding or care of livestock but not silos used for storing silage.
• Manure loaders, spreaders, and pumping systems.
• Milking machines.
• One-way tillers.
• Plants or plant products that ordinarily constitute food or drink for human consumption including seeds, tubers, bulbs, corms and rhizomes used to raise the plants.
• Plows.
• Potato planters and diggers.
• Poultry brooders, incubators, cages, nests, pit cleaners and other equipment designed for use in the handling, feeding or care of poultry.
• Rock pickers and weeders.
• Seeders, seed drills and seed treating equipment.
• Silage cutters.
• Silo unloaders.
• Slatted flooring for livestock barns.
• Straw bunchers and chaff savers.
• Straw choppers and spreaders including extensions.
• Swathers and swath turners.
• Vegetable harvesters.

Section 3 - PURCHASES THAT ARE NOT PRINCIPALLY FOR FARMING

• Aerial photographs, including infrared crop photographs.
• Air conditioners for household use.
• Aircraft not specifically designed and licensed for farm spraying.
• All-terrain vehicles (see List "D" for exception).
• Antifreeze and other additives.
• Automobiles, trucks, trailers and other vehicles required to be licensed under The Highway Traffic Act and all parts, repairs and service to such vehicles.
• Barns, animal shelters and other farm buildings or structures, whether movable or immovable (except certain farm storage structures as per List "D").
• Batteries, tires and tubes of a size or type that can be used for a car or truck.
• Boxes for trucks required to be licensed under The Highway Traffic Act.
• Air compressors and related equipment.
• Chain saws.
• Computers and software, but computers and software that are a part of exempt farm equipment may be purchased tax exempt.
• Culverts.
• Disinfectants.
• Field marker dye and field marker soap.
• Fuel storage tanks, pumps, hoses, etc. for handling fuel except for propane tanks if used exclusively for a grain dryer.
• Grease and lubricating oil.
• Hardware, electrical supplies and plumbing supplies (except when part of exempt water supply systems or other exempt farm machinery).
• Heaters, radios and air conditioning equipment, when purchased separately from, and not specifically designed for, a farm tractor or other farm machinery.
• Hoists and power take-offs on equipment used for hauling sand, gravel, earth, etc.
• Household appliances.
• Lawn and riding mowers.
• Lighting plants, generators and emergency power transfer switches for domestic use.
• Lumber, paint and other building materials.
• Motorcycles.
• Nuts, bolts, screws and other fasteners (see Repair Parts under List "A" for exception).
• Road construction and maintenance equipment.
• Rope (rope for haystack covers is exempted).
• Safety clothing and safety equipment.
• Scales for weighing trucks.
• Shop equipment, including all power equipment and hand tools.
• Silos.
• Soaps, detergents and other cleaning compounds.
• Snow blowers and attachments (tractor-mounted snow blowers used principally for farm-use are exempt).
• Snowmobiles
• Steel pipe, angle iron, sheet steel and other materials purchased for general farm use (see List "D" for exception).
• Tarpaulins and other covers for trucks or general purpose use.
• Trailers that are required to be licensed under The Highway Traffic Act.
• Water pressure systems used mainly for household use.
• Water softeners, including water softener salt and iron removers.
• Welding equipment of all types and welding gases.

Section 4 - EXEMPTION ALLOWED BY REFUND

• All-terrain vehicles.
• Farm storage buildings constructed from steel or pre-cast concrete and designed and used specifically for storing potatoes, grain and other field crops grown commercially for sale. (For additional information, see Bulletin No. 021- Granaries and Farm Storage Buildings)
• Equipment for clearing or levelling land or for moving earth.
• Garden tractors under 16 H.P. and their accessories.
• Liners for manure lagoons purchased from a contractor in a one price supply and install contract. The farmer must attach documentation proving that the contractor paid the tax in respect of the liner.
• Riding mowers.
• Roto tillers.
• Saddles.
• Trenchers.
• Unfinished lumber that normally would not be used for building materials and railway ties purchased for farm fencing. The vendor must collect the tax on the sale and the purchaser may subsequently apply to the Taxation Division to have a refund claim considered.

• Steel, bolts, screws, hardware and other general purpose materials and parts purchased by farmers are generally taxable. Therefore businesses must collect the tax on sales of these materials to farmers. However, farmers who purchase these materials to manufacture farm equipment,or repair parts for farm equipment, may apply to the Taxation Division for a refund of the tax paid. If upon review of the application, the Taxation Division is satisfied that the materials and parts were purchased to manufacture equipment or a part therefor used principally for farming, the tax on these items may be refunded to the farmer.

Section 5 - OTHER TAXES

• Farmers may purchase marked fuel (exempt) for the following uses:
  • To operate agricultural machinery while carrying out agricultural work on farm land.
  • To operate farm trucks with "Farm Plate" issued under The Highway Traffic Act.
• Heating fuel, electricity, propane and natural gas may be purchased exempt for the following uses:
  • To heat farm buildings situated on a farm used exclusively for the growing of farm crops or raising livestock, including a farm residence.
  • To produce heat exclusively in the operation of a grain dryer situated on farm land.

FURTHER INFORMATION

This bulletin is intended to serve as a guideline and is not all-inclusive. For the specific wording of the law, please refer to the Acts and Regulation stated below. Further information may be obtained from: