Information Release

ST 2002-02 - Portable Grain Bins, Field Tile, Livestock Structures, Horticulture Structures - Issued April 2002; Revised May 2007

This information release updates the statutory reference for the exemption for the purchase of materials to be incorporated into a horticulture or livestock structure by a person engaged in the business of horticulture or of producing livestock, and makes certain stylistic changes.

Portable Grain Bins

Pursuant to Ohio Revised Code (R.C.) 5739.01(B)(5) the sale and erection or installation of portable grain bins are not construction contracts. Portable grain bins are not classified as real property.

Since the sale and erection or installation of portable grain bins is never a construction contract, the transaction involving portable grain bins is a retail sale. "Portable grain bin" is defined in R.C. 5739.01(B)(5)(b) as:

a structure that is used or to be used by a person engaged in farming or agriculture to shelter the person’s grain and that is designed to be disassembled without significant damage to its component parts.

A farmer or other person engaged in agriculture as a business or a contractor employed by either to assemble the portable grain bin may purchase it without payment of the tax by presenting a certificate of exemption citing R.C. 5739.02(B)(31). This exemption provides that the "sales and erection or installation of portable grain bins, as defined in division (B)(5)(b) of section 5739.01 of the Revised Code” are not subject to tax.

Field Tile

R.C. 5739.01(B)(5) provides that the sale and installation of agricultural land tile is not a construction contract. Division (a) of that section defines what is included and excluded from the tax.

"Agricultural land tile" means fired clay or concrete tile, or flexible or rigid perforated plastic pipe or tubing, incorporated or to be incorporated into a subsurface drainage system appurtenant to land used or to be used directly in production by farming, agriculture, horticulture, or floriculture. The term does not include such materials when they are or are to be incorporated into a drainage system appurtenant to a building or structure even if the building or structure is used or to be used in such production.

This provision also applies when the agricultural land tile is to be placed in land leased to others who use the land for agricultural purposes and custom farming. A farmer or person engaged in agriculture or a contractor employed by either, when purchasing this tile, may cite R.C. 5739.02(B)(30). This provision provides that the "Sales and installation of agricultural land tile, as defined in division (B)(5)(a) of section 5739.01 of the Revised Code" are not taxable. The person claiming the exemption must provide a certificate of exemption to its vendor when claiming this exemption. A contractor doing such work may use this exemption only for the materials placed in the ground not for any tools, supplies, equipment, or services to accomplish the work.

Livestock and Horticulture Structures

R.C. 5739.01 defines that:

(OO) "Livestock" means farm animals commonly raised for food or food production, and includes but is not limited to cattle, sheep, goats, swine, and poultry. "Livestock" does not include invertebrates, fish, amphibians, reptiles, horses, domestic pets, animals for use in laboratories or for exhibition, or other animals not commonly raised for food or food production.

(PP) "Livestock structure" means a building or structure used exclusively for the housing, raising, feeding, or sheltering of livestock, and includes feed storage or handling structures and structures for livestock waste handling.

(QQ) "Horticulture" means the growing, cultivation, and production of flowers, fruits, herbs, vegetables, sod, mushrooms, and nursery stock. As used in this division, "nursery stock" has the same meaning as in section 927.51 of the Revised Code.

(RR) "Horticulture structure" means a building or structure used exclusively for the commercial growing, raising, or overwintering of horticultural products, and includes the area used for stocking, storing, and packing horticultural products when done in conjunction with the production of those products.

A person engaged in the business of horticulture or of producing livestock may purchase materials to be incorporated into a horticulture or livestock structure by presenting to a supplier a certificate of exemption citing R.C. 5739.02(B)(36). This provision provides an exemption for "sales to a person engaged in the business of horticulture or producing livestock of materials to be incorporated into a horticulture structure or livestock structure."

A construction contractor may claim an exemption under R.C. 5739.02(B)(13) for "building and construction materials *** for incorporation into a horticulture structure or livestock structure for a person engaged in the business of horticulture or producing livestock." The contractor must provide its supplier with a certificate of exemption. This exemption does not apply to any tools, construction equipment, fuels, supplies or services used in the construction of the livestock structure or horticulture structure.

If you have any questions regarding this information release, please contact Taxpayer Services at 1-888-405-4039, or e-mail us through our Web site: tax.ohio.gov.

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