Agricultural Materials and Equipment Sales & Use Tax Exemptions

Virginia offers sales and use tax exemptions for use by a farmer for purchase of tangible personal property for use in producing agricultural products for market, medicine and drugs sold to a veterinarian, or property used to produce agricultural products for market in an environment commercial agricultural facility. Prior to exemptions, the Commonwealth’s combined state and local sales and use tax is 5.3% (4.3% state tax and 1.0% local tax). An additional sales tax is imposed in the Hampton Roads, Northern Virginia, and Richmond regions for a total 6.0% rate, in Patrick County and the City of Danville for a total 6.3%, and in the City of Williamsburg and the Counties of James City and York, for a total 7.0% rate. Contact Office of Customer Services Virginia Department of Taxation 804.367.8037 Eligibility 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 maintain the necessary growing environment for plants, including towers for growing plants; conveyances for moving such towers; and cladding; (ii) for lighting systems; (iii) for air circulation systems; and (iv) for watering and water treatment systems External equipment required (i) for air circulation systems; (ii) for utility upgrades and related distribution infrastructure; and (iii) for maintaining the necessary growing environment for plants; and Structural components of (i) cladding used in indoor vertical farming to create and maintain the necessary growing environment for plants or (ii) translucent or transparent elements, including 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. Process 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. Resources Form ST-18 Code of Virginia *Combined State and Local Sales and Use Tax Rate Map* FAQ 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 Beach, and Williamsburg; and the counties of Isle of Wight, James 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?