LR 7950

Sale of Live, Unprocessed Fish, Raised by Seller, is Not Subject to Sales Tax

June 05, 2018

Dear Applicant:


          This is a letter ruling issued by the Director of Revenue under Section 536.021.10, RSMo, and Missouri Code of State Regulations 12 CSR 10-1.020, in response to your letter dated April 10, 2018.


          The facts as presented in your letter ruling request and in a conversation with the Director’s counsel are summarized as follows:


Applicant operates a 20-acre farm that includes a greenhouse where it grows vegetables for sale directly to customers.  On its farm, Applicant also grows and raises tilapia.  These fish are raised in tanks in which the fish waste provides nitrate fertilization to Applicant’s vegetables.  Once reaching market size for human consumption, Applicant makes retail sales of the tilapia directly to customers from its farm.  The fish are sold whole and unprocessed, and on ice in styrofoam containers.  Applicant does not kill, gut, or otherwise process the tilapia.  When a customer wishes to purchase the tilapia, Applicant harvests them live from its tanks.  When packed on ice and sold by Applicant, the fish are alive but will die shortly thereafter if not placed back in habitable water. 




          Are Applicant’s sales of whole, unprocessed, live tilapia subject to sales tax?




          No.  Applicant’s sales of whole, unprocessed, live tilapia are not subject to sales tax. 


Section 144.020.1, RSMo, imposes a sales tax “[u]pon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.”


Section 144.030.2(30), RSMo, provides an exemption from sales and use tax for “all livestock sales when either the seller is engaged in the growing, producing or feeding of such livestock, or the seller is engaged in the business of buying and selling, bartering or leasing of such livestock[.]” 


Section 144.010.1(6), RSMo, defines “livestock” as “cattle, calves, sheep, swine, ratite birds, including but not limited to, ostrich and emu, aquatic products as defined in section 277.024, llamas, alpaca, buffalo, elk documented as obtained from a legal source and not from the wild, goats, horses, other equine, or rabbits raised in confinement for human consumption[.]”  Emphasis added.


Section 277.024, RSMo, provides:


Aquatic products classified as livestock. — 1.  As used in this section, the term "aquaculture" means the controlled propagation, growth and harvest of aquatic organisms, as defined by rule of the conservation commission.


  2.   For the purposes of construction of any law of this state or any rule or regulation promulgated by any department, board, or commission of this state, aquatic products obtained through aquaculture shall be treated and classified as livestock.


          Emphasis added.


Part of Applicant’s business is fish farming, an activity qualifying as “aquaculture” under Section 277.024, RSMo.  Applicant grows and produces tilapia in tanks on its farm and harvests them live to sell to customers.  Fish are aquatic organisms and qualify as “aquatic products” under Section 277.024, RSMo, and therefore “livestock” under Section 144.010.1(6), RSMo.  See also Ozark Fisheries, Inc., Petitioner v. Director of Revenue, Case No. No. 97-001491 RV (Mo. Admin. Hear'g Comm'n, April 15, 1998) (determining that for purposes of the exemption provided under Section 144.030.2(1), RSMo, fish are “livestock” as opposed to “crops”).  Therefore, Applicant’s sales of live tilapia are exempt from sales and use tax under Section 144.030.2(30), RSMo.


If Applicant were to slaughter and process the fish for home consumption and sell them at retail, such sales would be sales of food subject to sales tax under Section 144.020.1, RSMo. 


          This letter ruling is binding upon the Department of Revenue with respect to the Applicant for three (3) years from the date of this letter and is subject only to statutory changes by the General Assembly and to changes in the interpretation of law by the courts or administrative tribunals.  If a change occurs, the taxpayer who relies upon an outdated interpretation may be subject to additional taxes, interest and penalties, which may be imposed prospectively from the date of the change.  For this reason, the interpretation set forth above should be reviewed on a regular basis.  Please note that any change in or deviation from the facts as presented will render this ruling inapplicable.


          Should additional information be needed, please contact Senior Counsel Benjamin C. Slawson, General Counsel’s Office, Post Office Box 475, Jefferson City, Missouri 65105-0475 (Telephone 573-751-0961), or me.




Joel W. Walters