Exemptions from tax — Cotton gin baling materials, agricultural seed, and tomato twine

(a)(1) The gross receipts or gross proceeds derived from the sale of bagging, packaging, and tie materials sold to and used by cotton gins in Arkansas for packaging and tying or for packaging or tying baled cotton in Arkansas are exempt from the tax.

(2) The gross receipts or gross proceeds derived from the sale of twine that is used in production of tomato crops in Arkansas are exempt from the tax.

(b) The gross receipts or gross proceeds derived from the sale of cotton, seed cotton, lint cotton, or baled cotton, whether the cotton is compressed or not, are exempt from this tax.

(c) The gross receipts or gross proceeds derived from the sale of cotton seed in its original condition are exempt from the tax.
(d)(1) The gross receipts or gross proceeds derived from the sale of seed to be used in the commercial production of any agricultural product or in the commercial production of any agricultural seed are exempt from the tax.

(2) Also, the gross receipts or gross proceeds derived from the sale of seedlings used in the commercial production of timber are exempt from tax.

(3) For purposes of this subsection the term “commercial production” means that the purchaser of the seed or seedling is engaged in the business of growing agricultural products, including the production of timber.

(e) The term “agricultural” means operations engaged in for the production of:

(1) Food;

(2) Fiber or timber;

(3) Sod; or

(4) Nurseryman products.