Tennessee § 67-5-216 - Growing crops.

§ 67-5-216. Growing crops.

All growing crops of whatever kind, including, but not limited to, timber, nursery stock, shrubs, flowers, and ornamental trees, the direct product of the soil of this state or any other state of the union, in the hands of the producer or the producer's immediate vendee, and articles manufactured from the produce of this state, or any other state of the union, in the hands of the manufacturer, shall be exempt from taxation. All livestock and poultry of whatever kind in the hands of the producer or the producer's immediate vendee shall be exempt from taxation. “Immediate vendee” is limited to farm use and does not include any person using such products in meat processing. “Articles manufactured from the produce of this state, or any other state of the union, in the hands of the manufacturer” include and have always included aged whiskey barrels during the time in which such barrels are owned or leased by a person that produces or manufactures whiskey in those barrels. For purposes of this subsection (c), an “aged whiskey barrel” is defined as a barrel that: Is comprised of the timber of this state, or any other state of the union; Contains, or has contained, whiskey; and Has changed, or will change, in form or appearance as a result of the unique process of aging whiskey. For purposes of this subsection (c), “whiskey” has the same meaning as the term “whisky” as defined in 27 CFR 5.22(b) and includes all products identified as “whisky” in 27 CFR 5.22(b). Acts 1973, ch. 226, § 5; 1977, ch. 84, § 1; T.C.A., § 67-517; Acts 2018, ch. 971, § 1. Compiler's Notes. Acts 2018, ch. 971, § 2 provided that any action or proceeding to correct an assessment or request a refund or other relief on the basis of the act, which amended this section, shall be subject to the applicable statutes of limitations, which are in no way altered or amended by the act. Acts 2018, ch. 971, § 3 provided that the act, which amended this section, shall apply retroactively to all periods prior to May 17, 2018. Amendments. The 2018 amendment added (c). Effective Dates. Acts 2018, ch. 971, § 3. May 17, 2018. Textbooks. Tennessee Jurisprudence, 23 Tenn. Juris., Taxation, § 21. Attorney General Opinions. The proposed legislation would exempt from taxation wooden barrels while the barrels are used to produce whiskey. But those barrels are not within the scope of the exemption allowed for “manufactured articles” under article II, section 30 of the Tennessee Constitution. The legislative finding to the contrary notwithstanding, barrels used by a whiskey maker to age whiskey are not “manufactured articles” as that term has long been construed by the Tennessee Supreme Court. A statute exempting such barrels from taxation would not comport with article II, section 30, of the Tennessee Constitution. OAG 18-06, 2018 Tenn. AG LEXIS 49 (3/5/2018). Proposed Senate Bill 2076/House Bill 2038, 110th Tenn. Gen. Assem. (2018), as amended by Amendment No. 2 to HB 2038 (HA 0942/Drafting Code 014670), is not constitutional. Under article II, section 30, of the Tennessee Constitution, as interpreted and construed by the Tennessee Supreme Court, an article being used to manufacture another product — such as a barrel being used by a whiskey maker to manufacture aged whiskey — is not entitled to an exemption from constitutionally mandated ad valorem taxation, and it is not within the legislative power to override or modify a judicial interpretation of the Constitution. OAG 18-15, 2018 Tenn. AG LEXIS 12 (3/26/2018).