Agricultural Materials and Equipment Sales & Use Tax Exemptions

Agricultural exemptions include:

• Commercial feeds
• Seeds
• Plants
• Livestock
• Agricultural chemicals
• Farm machinery
• Drugs sold to a veterinarian for use on animals being raised for market
• Drugs sold to a veterinarian for resale to a farmer to use on animals being raised for market
• Property used directly in producing agricultural products for market in an indoor, closed, controlled-environment commercial agricultural facility

The following property used directly in producing agricultural products for market in an indoor, closed, controlled-environment commercial agriculture facility are exempted:

• Internal components or materials, whether or not they are affixed to real property, required (i) to create, support, and maintain the necessary growing environment for plants, including towers for growing plants; conveyances for moving such towers; and insulation, partitions, and cladding; (ii) for lighting systems; (iii) for heating, cooling, humidification, dehumidification, and air circulation systems; and (iv) for watering and water treatment systems
• External components, machinery, and equipment required (i) for heating, cooling, humidification, dehumidification, and air circulation systems; (ii) for utility upgrades and related distribution infrastructure; and (iii) for creating, supporting, and maintaining the necessary growing environment for plants; and
• Structural components of (i) insulation, partitions, or cladding used in indoor vertical farming to create and maintain the necessary growing environment for plants or (ii) translucent or transparent elements, including windows, walls, and roofs, that allow sunlight in greenhouses to create and maintain the necessary growing environment for plants.

Also, contractors working on behalf of owners of facilities which are exempt under these provisions are allowed to use the exemption when purchasing materials that would otherwise qualify for the exemption. 

The exemption does not apply to property used in producing cannabis. 

• When purchasing qualified equipment, the eligible company completes Form ST-18, which it provides to the seller.
• The seller does not collect the retail sales and use tax on the qualifying equipment, but is then responsible for keeping the completed Certificate of Exemption on hand for their records if needed at a later date.

Form ST-18

Code of Virginia

*Combined State and Local Sales and Use Tax Rate Map*

What localities have the additional 0.7% tax in the Hampton Roads region?

The additional 0.7% regional rate in Hampton Roads applies to the cities of Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, and Williamsburg; and the counties of Isle of Wight, James City, Southampton, and York. An additional 1% is imposed in City of Williamsburg and the Counties of James City and York, for a total 7.0% rate.

What localities have the additional 0.7% tax in the Richmond region?

The additional 0.7% regional rate in the Richmond area is effective beginning October 1, 2020 and applies to the city of Richmond; and the counties of Charles City, Chesterfield, Goochland, Hanover, Henrico, New Kent, and Powhatan.

What localities have the additional 0.7% tax in the Northern Virginia region?

The additional 0.7% regional rate in Northern Virginia applies to the cities of Alexandria, Fairfax, Falls Church, Manassas, and Manassas Park; and in the counties of Arlington, Fairfax, Loudoun, and Prince William.

When is the retail sales and use tax due?

Retail sales and use tax is due when such property is either (i) delivered to the purchaser, or (ii) paid for in full by the purchaser, whichever occurs first, regardless of when the property is ordered. As such, this is when the exemption must be claimed. This is not a refund given after paying the sales and use tax.

Does other agricultural equipment qualify for this tax exemption? 

Yes, other qualifying agricultural exemptions include: commercial feed, livestock, machinery and equipment, commercial watermen materials and equipment, forest product harvesting materials and equipment, agricultural commodities to be processed, and feed processing materials and equipment. 

For a fully comprehensive list please see the Virginia Department of Taxation Website or contact at the Virginia Department of Taxation at 804.367.8037