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Ruling 89-227

Agricultural Production


In granting this exemption for tangible personal property used exclusively in agricultural production, the General Assembly included in the law the requirement that the Department of Revenue Services could issue an agricultural sales tax exemption permit only when a farmer's gross income from sales of agricultural products was $2,500 or more in the preceding calendar year, as reported for federal income tax purposes.

In setting the $2,500 threshold amount for qualification for the exemption, the legislature made no provision either for "start-up" farm businesses or for current farm businesses with gross income of less than $2,500 to apply to this Department for refunds once the $2,500 threshold was attained.

It is a well-known principle of statutory construction that exemptions from taxation are to be strictly construed. As exemptions from taxation are matters of legislative grace, I do not have the authority to extend the limitations imposed by the General Assembly on the scope of this exemption. Accordingly, I must deny your request for a farmer tax exemption permit.

TIMOTHY F. BANNON
COMMISSIONER

November 21, 1989