According to the Agricultural Land Use Guidelines and Standards for Texas, chickens can be used for an AG exemption, yes. This is great news for all chicken owners. But before you get carried away, it’s not as simple as saying you have some backyard chickens and getting ‘farm credits’ as the tax exemption is often called.
Do chickens qualify for AG exemption in Texas?
If you live in Texas or you’re considering starting a new life in Texas, you may have heard of the ag exemption that could save you some coin. This exemption allows you to be placed under a different valuation method and consequently enjoy tax savings.
As a rule of thumb, your chickens may qualify for the Ag exemption if you would honestly consider them as an integral part of an agricultural business. You sell eggs or meat for a profit and you have obtained the necessary permits from the relevant authorities. You will still be required to meet the basic requirements as mentioned above.
The answer is; Yes, chickens can qualify for Agricultural Exemption, although there are many eligibility requirements. I’ll say off the top; this is a topic best discussed with a qualified tax professional if you want an accurate answer, as there are some stipulations that will be specific to your individual circumstances.
What qualifies for AG exemption in Texas?
Only land that is primarily being used – and has been used for at least five of the past seven years – for agricultural purposes may qualify for an ag exemption in Texas. Agricultural purposes include crop production, livestock, beekeeping, and similar activities.
Ag exemption requirements vary by county, but generally speaking, you need at least 10 acres of qualified agricultural land to be eligible for the special valuation. What qualifies as ag exemption in Texas?
You may well qualify depending on the number of hens and their use. Chickens may be eligible for the Ag exemption, provided they can genuinely be considered an integral part of an agricultural business.
Do I need an AG/timber number to buy animal feed in Texas?
You must give the retailer a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF) when purchasing them. The certificate must specifically explain the exempt purpose for which the animal or feed will be used. You do not need an Ag/Timber Number to buy them.
Some animals and their feed do not qualify for the ag/timber exemption, but do qualify for the standard sales and use tax exemption. You must give the retailer a properly completed Form 01-339, Texas Sales and Use Tax Exemption Certificate (PDF) when purchasing them.
Can You claim an agricultural exemption if you are not a farmer?
Claiming an agricultural exemption when you’re not a full-time farmer isn’t something you want to do without careful attention to the rules. For example, if you sell an agricultural product grown on your property (jam, honey, vegetables, eggs from chickens, flowers), you might need the okay of your local health department.