Ruling 89-126, Agent for Sale
Your letter inquires whether a farmers cooperative is "a farmer engaged in agricultural production as a trade or business"; Conn. Pub. Acts No. 89-123, § 9.
The cooperative in question, Company X, is described in your letter as a provider of various services to its members. These services include the steaming and fumigation of tobacco leaves and the shipment of those leaves to the Dominican Republic. The members retain title to their tobacco until the cooperative, as agent for its members, negotiate the sale of the tobacco to cigar manufacturers.
These activities do not fall within the definition of "agricultural production" which, in relevant part, means "the raising and harvesting of any agricultural or horticultural commodity." Conn. Pub. Acts No. 89-123, § 9.
Because the cooperative does not raise or harvest or both raise and harvest an agricultural or horticultural commodity, sales to the cooperative will not be sales exempted from sales and use taxes pursuant to Conn. Pub. Acts No. 89-123, § 9.
September 27, 1989