Qualifying farmers get an exemption from sales and use tax for certain tangible personal property, digital property, and services. Effective July 1, a qualifying farmer is a person who has an annual gross income for the pre- ceding income tax year of $10,000 or more from farming operations or who has an average annual gross income for the 3 preceding income tax years of $10,000 or more from farming operations. A qualifying farmer includes a dairy operator, a poultry farmer, an egg producer, a livestock farmer, a farmer of crops, and a farmer of an aquatic species. For purposes of the exemption, an item is used in farming operations if it is used for planting, cultivating, harvesting, or curing of farm crops or in the production of dairy products, eggs, or animals. To apply for a qualifying farmer ex- emption certificate number, complete and submit Form E-595QF, Application for Qualifying Farmer Exemption Certificate Number, to the DOR.

A person who does not meet the definition of qualifying farmer may apply to the DOR for a conditional farmer exemption certificate number. A conditional farmer may purchase qualifying items exempt from sales and use tax to the same extent as a qualifying farmer. To receive a conditional farmer exemption certificate, the person must certify that the person intends to engage in farming operations and that the person will timely file state and federal tax returns that reflect income and expenses incurred from farming operations. The certificate number is valid for 3 years and cannot be renewed or extended. To apply for a conditional farmer exemption certificate number, complete and submit Form E-595CF, Application for Conditional Farmer Exemption Certificate Number. The DOR may not issue a conditional farmer exemption certificate to a person who has had a conditional farmer exemption certificate issued during the prior 15 income tax years.