86 Ill. Adm. Code 130.1955 — Farm Chemicals

# Farm Chemicals

TITLE 86: REVENUE CHAPTER I: DEPARTMENT OF REVENUE PART 130 RETAILERS' OCCUPATION TAX SECTION 130.1955 FARM CHEMICALS

Section 130.1955 Farm Chemicals a) Vendors of farm chemicals are exempt from Retailers' Occupation Tax on their receipts from such sales. [35 ILCS 120/2-5(a)] b) Farm chemicals include any chemical product used in production agriculture, the products of which are to be sold, or in the production or care of animals that are to be sold or the products of which are to be sold. Examples of exempted items include, but are not limited to, stock sprays, disinfectants and the like, stock tonics, serums, vaccines, poultry remedies and other medicinal preparations and conditioners, water purifying products, insecticides, and weed killers and the like. c) Specific examples include:

1) Chemicals applied to crops or fields to control disease, pests, and weeds qualify for the exemption as well as chemicals applied to farm animals to control disease or pests as long as they are used in conjunction with animals to be sold or the products of which are to be sold.

2) Chemicals used to reduce the hardness of water and to increase water penetration into the soil are exempt.

3) Shading chemicals sprayed on greenhouse windows qualify because they are used in connection with the raising of crops by regulating the amount of sunlight exposure on the plants. See Mid-American Growers, Inc v. Department of Revenue, 143 Ill. App. 3d 600, 606 (3d Dist. 1986).

4) The retail sale of nematodes qualifies for the farm chemical exemption if the nematodes are used in production agriculture. Nematodes are tiny worms that kill insects and fleas when applied to agricultural fields, lawns, etc. However, the production of nematodes does not qualify for the farm chemical exemption, the manufacturing machinery and equipment exemption, or the farm machinery and equipment exemption. d) Chemicals and disinfectants used for general farm maintenance, such as to clean milking machines and pipelines do not qualify for the farm chemical exemption. (Source: Amended at 49 Ill. Reg. 2107, effective February 5, 2025)

Section 130.1955 Farm Chemicals

a) Vendors of farm chemicals are exempt from Retailers' Occupation Tax on their receipts from such sales. [35 ILCS 120/2-5(a)]

b) Farm chemicals include any chemical product used in production agriculture, the products of which are to be sold, or in the production or care of animals that are to be sold or the products of which are to be sold. Examples of exempted items include, but are not limited to, stock sprays, disinfectants and the like, stock tonics, serums, vaccines, poultry remedies and other medicinal preparations and conditioners, water purifying products, insecticides, and weed killers and the like.

c) Specific examples include:

1) Chemicals applied to crops or fields to control disease, pests, and weeds qualify for the exemption as well as chemicals applied to farm animals to control disease or pests as long as they are used in conjunction with animals to be sold or the products of which are to be sold.

2) Chemicals used to reduce the hardness of water and to increase water penetration into the soil are exempt.

3) Shading chemicals sprayed on greenhouse windows qualify because they are used in connection with the raising of crops by regulating the amount of sunlight exposure on the plants. See Mid-American Growers, Inc v. Department of Revenue, 143 Ill. App. 3d 600, 606 (3d Dist. 1986).

4) The retail sale of nematodes qualifies for the farm chemical exemption if the nematodes are used in production agriculture. Nematodes are tiny worms that kill insects and fleas when applied to agricultural fields, lawns, etc. However, the production of nematodes does not qualify for the farm chemical exemption, the manufacturing machinery and equipment exemption, or the farm machinery and equipment exemption.

d) Chemicals and disinfectants used for general farm maintenance, such as to clean milking machines and pipelines do not qualify for the farm chemical exemption.

(Source: Amended at 49 Ill. Reg. 2107, effective February 5, 2025)