Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 1.
(a)
Definitions. "
Farmers" means only those persons occupationally engaged in
producing food or agricultural commodities for sale or for further use in
producing food or such commodities for sale. These terms are limited to those
persons, partnerships, or corporations regularly engaged in the commercial
production for sale of vegetables, fruits, crops, livestock, poultry, and other
food or agricultural products. Only those persons, partnerships, or
corporations whose intention it is to produce such food or commodities at a
profit and not those persons who intend to engage in such production for
pleasure or as a hobby qualify within this definition.
"Farming" means engaging in the commercial production of food
or agricultural commodities as a farmer.
"To be directly used by the farmer in the direct production
of food or agricultural commodities" requires that the property in question
must have an immediate effect on the article being produced. Property has an
immediate effect on the article being produced if it is an essential and
integral part of an integrated process which produces food or an agricultural
commodity.
(b) The state
gross retail tax shall not apply to:
(1) Sales
to farmers of animals and poultry used for breeding purposes are exempt from
tax provided the farmer used such animals and poultry to breed animals and
poultry to be used by the farmer in the production of food or agricultural
commodities.
(2) Sales to farmers
of animals and poultry to be directly used by the farmer in the direct
production of food and agricultural commodities are exempt from tax. Domestic
animals and birds, pets, game animals and birds, furbearing animals, fish, and
other animals or poultry not directly used by the farmer in the direct
production of food or agricultural commodities are subject to tax. Baby chicks,
ducklings, geese, turkey poults, hatching eggs, pigs, hogs [sic., ,]
lambs, sheep, livestock, calves, and cows are exempt from tax,
provided that they are directly used by the farmer in the direct production of
food or agricultural commodities for sale.
(3) Sales to farmers and to other persons
occupationally engaged in the business of producing food and agricultural
commodities for human, animal, or poultry consumption (either for sale or for
further use in producing such food and agricultural commodities for sale) of
animal and poultry life to be directly used by the purchaser in the direct
production of food and agricultural commodities.
(4) Sales of animals and poultry to a farmer
to be directly used by the farmer in the direct production of food or
agricultural commodities (either for sale or for further use in producing such
food or commodities for sale) for human, animal, or poultry consumption are
exempt from tax.
(c)
Energy Equipment.
(1) Equipment used to
modify energy purchased from public utilities for the production process is
exempt if the equipment is used to modify the utilities for use by exempt
equipment.
(2) Equipment used to
create energy that could otherwise be purchased exempt from a public utility
for use by exempt equipment is exempt.
(3) When any equipment qualifies as essential
and integral to the production process and also is used in an alternative
nonessential and/or non-integral manner, the exemption shall only apply to the
percentage (%) of use of the equipment used in the exempt manner.
