90-81 | Virginia Tax

Tax Type

Retail Sales and Use Tax

Description

Llama breeding and sales; Agricultural exemption denied

Topic

Exemptions

Date Issued

05-09-1990

May 9, 1990

Re: Ruling Request/ Sales and Use Tax

Dear *******************

This will reply to your letter of December 1, 1989 seeking reconsideration of my May 20, 1988 ruling, which denied an exemption from the sales and use tax for persons engaged in the breeding and sale of llamas.

FACTS

In support of your request for reconsideration you have submitted an article published in "Llama Life", which cites proposed March 1989 federal regulations which state that the United States Department of Agriculture now considers certain llamas to be farm animals.

RULING

Va. Code §58.1-608(2)(a) provides an exemption from the sales and use tax for:

- breeding and other livestock...baby chicks, turkey poults, rabbits, quail...[and] all other tangible personal property, except for structural construction materials, necessary for use in agricultural production for market...[and] agricultural supplies provided the same are sold to and purchased by farmers for use in agricultural production, including fish, quail, rabbit and worm farming for market. (Emphasis added)

As can be seen from the above statute, the agricultural exemption was expanded by the 1989 General Assembly to apply to rabbit and quail farming. Prior to this legislative change, rabbit and quail farmers were not deemed to qualify for the agricultural exemption, since rabbits and quail were not deemed to be livestock of the type customarily associated with agricultural production for market.

Thus, notwithstanding the demonstrated increase in the numbers of llamas used on farms for breeding purposes and the USDA's acceptance of certain llamas as farm animals, I continue to find no basis in the sales and use tax law to extend an exemption to the breeding and sale of llamas. The fact that specific legislation was necessary before the agricultural exemption could be extended to breeders of rabbit and quail, clearly indicates the General Assembly's intent that the exemption not be extended to the breeding of all animals.

I hope this has responded to your question, but let the department know if you have any further questions.

Sincerely,

W. H. Forst
Tax Commissioner

Rulings of the Tax Commissioner