(A) There is hereby specifically exempted from the tax levied by this subchapter, the gross receipts or gross proceeds exempted from the state’s Sales Tax Law inclusive, but not exclusive of, or derived from, the:
(1) Sale of raw products from the farm, orchard or garden where the sale is made by the producer of raw products directly to the consumer or user; gross receipts or gross proceeds derived from the sale of livestock, poultry products and dairy products by the producers; (Exemptions granted by this section shall not apply when the articles are sold, even though by the producer thereof, at or from an “established business place” not on a farm. This exemption shall not apply unless the articles are produced or grown within the state. The provisions of this section are intended to exempt the sale by livestock producers of livestock sold at special livestock sales. The provisions of this section are intended to exempt the sale of dairy products when sold by a dairyperson or farmer who owns all of the cows from which the dairy products he or she sells are produced. The provisions of this section shall not be construed to exempt sales by florists, nurserypersons and chicken hatcheries.)
(2) Dues paid to fraternal, religious, civic, charitable or educational societies or organizations by regular members thereof; provided, the societies or organizations operate under what is commonly termed the lodge plan or system and do not operate for a profit which inures to the benefit of any individual member or members thereof to exclusion of other members;
(3) Sale of tangible personal property or services to or by churches, except where the organizations may be engaged in business for profit or savings, competing with other persons engaged in the same or similar business;
(4) Gross receipts and gross proceeds deriving from the transportation of school children to and from schools and high schools in motor and other vehicles;
(5) Transportation of persons where the fare of each person does not exceed $0.15, or local transportation of persons within the corporate limits of cities and towns, except by taxicabs;
(6) Sales of food in public, common, high school or college cafeterias and lunch rooms operated primarily for teachers and pupils, but not operated primarily for the public or for profit;
(7) Carrier sales made directly to consumers or users of newspapers or any other periodicals where any individual transaction does not exceed $0.20;
(8) Sales to the United States Government, state or any of its political subdivisions;
(9) Sale of gasoline or motor fuel on which the motor fuel tax, gasoline excise tax or special fuels tax has been paid to the state;
(10) Sale of crude petroleum or natural or casinghead gas and other products subject to the gross production tax under the provisions of the laws of the state; (This exemption shall not apply when the products are sold to a consumer or user for consumption or use, except when used for injection into the search for the purpose of promoting or facilitating the production of oil or gas.)
(11) Sales of motor vehicles, attached optional equipment and accessories or which the State Motor Vehicles Excise Tax has been paid;
(12) Sales by county, district and state fairs;
(13) Sales of advertising space in newspapers, periodicals and billboards advertising services, and sales of time for radio and television broadcasts of advertising;
(14) Sales for resale to persons regularly engaged in the business of reselling articles purchased, whether within or without the state; (The sales to residents of the state are made to persons to whom sales permits have been issued by the State Tax Commission as provided by law. This exemption shall not apply to the sales of articles made to persons holding permits when the persons purchase items for their use and which they are not regularly engaged in the business of reselling; neither shall this exemption apply to sales of tangible personal property to peddlers, solicitors and other salesmen who do not have sales tax permits or established places of business.)
(15) Goods, wares, merchandise and property sold for use in manufacturing, compounding, processing, assembling or preparing for sale shall be classified as having been sold for the purpose of resale or the subject matter of resale, only in the event:
(a) The goods, wares, merchandise or property are purchased for the purpose of being manufactured into a finished article and if it becomes a recognizable and integral part of the manufactured, compounded, processed, assembled or prepared products; or
(b) If it is consumed in the process of manufacturing, compounding, processing, assembling or preparing products for resale.
(16) Sales of machinery and equipment purchased and used by persons establishing new manufacturing or processing plants in the state, and machinery and equipment purchased and used by persons in the operation of manufacturing plants already established in the state. (This exemption shall not apply unless the machinery and equipment is incorporated into and directly used in the process of manufacturing property subject to taxation hereunder; the term “manufacturing or processing operations” and generally recognized as such.)
(17) Sale of tangible personal property manufactured in the state, when sold by the manufacturer to a person who transports it to another state for immediate and exclusive use in some other state;
(18) Sale of an interest in tangible personal property to a partner or other persons who, after the sale, owns a joint interest in the tangible personal property where the state sales or use tax has previously been paid on the tangible personal property;
(19) Sales of containers shall be exempt, when sold to a person regularly engaged in the business of reselling empty or filled containers, or when he or she purchases the containers for the purpose of packaging raw products of farm, garden or orchard for resale to the consumer or processor; (This exemption shall not apply to the sale of containers used more than once and which are ordinarily known as returnable containers, unless a tax under this subchapter is collected and paid to the Tax Collector with respect to each and every transfer by the person of title or possession of the returnable container, if made to any consumer or user within this state; nor shall it apply to the sale of labels or other materials delivered along with items sold, but which are not necessary or absolutely essential to the sale of the sold merchandise.)
(20) Exemptions of poultry, livestock feed and farm machinery, as prescribed by the state’s Sales Tax Code, shall be equally applicable as exemptions from the tax herein levied;
(21) Sales of agricultural fertilizer to persons regularly engaged for profit in the business of farming and/or ranching, which are exempt from state sales taxes, shall likewise be exempt from the municipal sales tax herein levied;
(22) Sales of agricultural fertilizer to any person engaged in the business of supplying the materials on a contract or custom basis to land owned or leased and operated by persons regularly engaged, for profit, in the business of farming and/or ranching;
(23) Sales of agriculture seed or plants to any person regularly engaged, for profit, in the business of farming and/or ranching; this section shall not be construed as exempting from sales tax, seed which is packaged and sold for use in non-commercial flower and vegetable gardens;
(24) Sales of agricultural chemical pesticides to any person regularly engaged, for profit, in the business of farming and/or ranching;
(25) Gross proceeds from the sale of farm machinery and repair parts thereto, to be used directly on a farm or ranch in the production, cultivation, planting, sowing, harvesting, processing, spraying, preservation or irrigation of any livestock, poultry, agriculture or dairy products produced from the lands;
(26) Sales of tangible personal property or services to the Council organizations or similar state supervisory organizations of the Boy Scouts of America, the Girl Scouts and the Campfire Girls;
(27) Gross proceeds from the sale of baby chicks, turkey poultry and starter pullets used in the commercial production of chickens, turkeys and eggs; provided that, the purchaser certifies in writing on the copy of the invoice or sales ticket to be retained by the seller that the pullets will be used primarily for egg production; and
(28) All other applicable exemptions granted by future amendments to state sales tax statutes.
(B) Also, there is hereby specifically exempted from the tax herein levied, the transfer of tangible personal property exempted from the state sales tax law inclusive, but not exclusive, of the following:
(1) From one corporation to another corporation, pursuant to a reorganization. As used in this section, the term REORGANIZATION means:
(a) A statutory merger or consolidation; or
(b) The acquisition by a corporation of substantially all of the properties of another corporation, when the consideration is solely all or a part of the voting stock of the acquiring corporation, or of its parent or subsidiary corporation;
(2) In connection with the winding up, dissolution or liquidation of a corporation only when there is a distribution in kind to the shareholders of the property of the corporation;
(3) To a corporation for the purpose of organization of the corporation where the former owners of the property transferred are, immediately after the transfer, in control of the corporation, and the stock or securities received by each is substantially in proportion to this interest in the property prior to the transfer;
(4) To a partnership in the organization of the partnership if the former owners of the property transferred are immediately after the transfer, members of the partnership, and the interest in the partnership received by each is substantially in proportion to his or her interest in the property prior to the transfer; and
(5) From a partnership to the members thereof when made in kind in the dissolution of the partnership.
(2002 Code, § 35.07)