Information Release

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ST 2002-02 - Portable Grain Bins, Field Tile, Livestock Structures, Horticulture Structures

This Information Release rescinds the previous Information Release dated December 1985. It adds information concerning livestock and horticulture structures and provides statements and instructions for completing exemption certificates.

Portable Grain Bins

Ohio Revised Code, (R.C.) 5739.01(B)(5) removes from the classification of real property and excludes from construction contracts the sale and erection or installation of portable grain bins. By holding that the sale and erection or installation of portable grain bins is never a construction contract the transaction involving portable grain bins becomes a retail sale.The definition of a "Portable grain bin" is given at 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." The sale and installation of such bins are deemed to be a sale and are exempt when purchased by a qualified person as described above.

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 blanket or unit exemption certificate citing R.C. 5739.02(B)(31) "Sales and erection or installation of portable grain bins, as defined in division (B)(5)(b) of section 5739.01 of the Revised Code."

Field Tile

Ohio Revised Code (R.C.) 5739.01(B)(5) excludes the sale and installation of agricultural land tile from construction contracts. Letter (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 is used or to be used in such production.

 

The exception also applies when the land in which it is to be placed is land leased to others who use it 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) "Sales and installation of agricultural land tile, as defined in division (B)(5)(a) of the Revised Code" on an exemption certificate. 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

House Bill 632, effective July 22, 1994, gave definition in the Ohio Revised Code (R.C.) to various terms used in agriculture. A separate statutory definition is given for "Livestock", "Livestock structure", "Horticulture" and "Horticulture structure". R. C. 5739.01 reads at:

(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 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 material to be incorporated into a horticulture or livestock structure by presenting to a supplier an exemption certificate citing R.C. 5739.02(B)(37) "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 would cite on an exemption certificate to be given to its supplier R.C. 5739.02(B)(13) "building and construction materials sold to a construction contractor for incorporation into a horticulture structure or livestock structure for a person engaged in the business of horticulture or producing livestock." For the contractor these exclusions from the tax do not apply to any tools, construction equipment, fuels, supplies or services used in the construction of the livestock structure.

If you have any questions regarding this matter, you should call us at 1-888-405-4039.