The general rule for the application of sales or use tax is that a purchase of tangible personal property to be used in Indiana is subject to tax unless a specific exemption is available.
Indiana law provides several exemptions from sales and use tax relating to agricultural production. The exemptions are limited to purchases of animals, feed, seed, plants, fertilizer, insecticides, fungicides, and other tangible personal property and agricultural machinery, tools, and equipment to be directly used in the direct production of food or commodities that are sold either for human consumption or for further food or commodity production.
The phrase "directly used in direct production" means that the property must be integral and essential to the production process. Property is integral and essential to the production of food or commodities if it is necessary to carry on production and plays a key role in the actual production of the food or commodity (i.e., it must directly affect or be a component of the food or commodity). Some examples of property that are directly used in direct production are discussed later.
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II. EXEMPTION CERTIFICATES
Two types of exemption certificates can be used to purchase exempt agricultural-use property. Form ST-105 Indiana general sales tax exemption certificate allows property to be purchased exempt from tax if the property fits under one of the agricultural exemptions provided by Indiana law. Form F0003 (SSTGB Exemption Certificate) is an exemption certificate used by states participating in the Streamlined Sales and Use Tax Agreement. This form should be accepted by Indiana retailers and can be used by nonresident purchasers. The form is available at.
The purchaser does not need a certificate for each item purchased, but the purchaser must complete the form for each purchase before the exemption will be allowed, unless the purchaser checks the "blanket exemption" box, in which case the retail merchant may keep the exemption certificate on file for future purchases.
See the bulletin here:
See the bulletin here:
