45 IAC 2.2-5-7 - Direct production of grain; sales of agricultural machinery
Authority: IC 6-8.1-3-3
Affected: IC 6-2.5
Sec. 7.
(a)
Agricultural machinery, tools, and equipment directly used in the direct
production, extraction, harvesting, or processing of grain, from the time the
grain is harvested until the time the grain is dried, are exempt so long as the
agricultural machinery, tools, and equipment have an immediate effect upon the
grain. Property has an immediate effect on the grain being produced if it is an
essential and integral part of an integrated process which produces grain.
-EXAMPLE-
Machinery, tools, and equipment directly used in the processing, drying, or cleaning of grain.
(b) Transportation equipment directly used in
the direct production of grain is exempt so long as such equipment has an
immediate effect upon the grain. Property has an immediate effect on the grain
being produced if it is an essential and integral part of an integrated process
which produces grain.
(1) Grain augers which
contain perforated cleaning screens are exempt, since this equipment separates
foreign matter from grain and, therefore, is an essential and integral part of
an integrated process in direct production, which produces grain.
(2) Grain augers without perforated cleaning
screens used exclusively to transport wet grain are exempt, since such
transportation aerates wet grain and, therefore, has a direct and immediate
effect upon the grain and is an essential and integral part of an integrated
process which produces grain.
(3)
Machinery, tools, and equipment directly used to transport grain from the field
where it is harvested to the production processes of drying, cleaning, and
holding for the feeding of livestock, or to be further used in the production
of food and commodities are exempt.
(c) Wet holding tanks, continuous flow
driers, and batch driers are exempt, since these items are integral parts of
drying systems and, therefore, such equipment is directly used in direct
production of grain.
(d) Grain
drying bins. The department has determined that grain drying accessories of a
grain drying bin are exempt, since such equipment is used to dry wet grain and,
therefore, has a direct and immediate effect upon grain. Alternatively, the
department has determined that a grain drying bin's storage structure and parts
thereof are subject to tax, since the storage of grain has no direct and
immediate effect upon grain.
(1) The following
is a list of grain drying bin accessories which are exempt from tax:
(A) drying floor;
(B) air entrance;
(C) stirring devices;
(D) fans and motor running fans;
(E) electricity (if predominantly
used);
(F) electrical control
panels;
(G) spreader; and
(H) floor supports.
(2) The following is a partial list of grain
drying bin storage accessories which are subject to tax:
(A) anchor bolts;
(B) bin structure;
(C) roof and vents;
(D) unloading auger;
(E) clean sweep;
(F) wells and pulleys;
(G) platform; and
(H) ladders.
Notes
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