Installation Into Real Property

This section provides information about real property issues related to the agricultural and farming industries.

Building Materials, Supplies, and Equipment

Materials, supplies, and equipment used to construct, repair, or maintain real property are taxable. Examples include:

• Farm buildings
• Greenhouses
• Residence

The following are considered real property when they are permanently attached to real estate:

• Grain elevators
• Silos
• Storage bins

Note: When a contractor buys the materials and uses them to improve real property, the contractor must pay sales or use tax on the materials.

Farm Machinery Installed Into Real Property

When a contractor installs items that qualify for the farm machinery exemption into real property, the contractor may purchase the items exempt from sales tax. Give your supplier a completed Form ST3, Certificate of Exemption. Specify the farm machinery exemption.

Examples include:

• Barn cleaners
• Feeding systems
• Grain dryers
• Irrigation equipment
• Milking systems

Contractors may also buy repair and replacement parts for this equipment exempt from sales tax.