TAXATION ‑- PERSONAL PROPERTY TAX ‑- ALFALFA SEED ‑- WHEN EXEMPTION APPLICABLE.
(1) Alfalfa seed sold and delivered by the farmer-producer to a processor is subject to applicable property taxes even though it is shipped out of the state on or before April 30 of the first year in which it would otherwise be taxable.
(2) Alfalfa seed is exempt from property taxes otherwise applicable if owned by the farmer-producer on the first day of January following harvesting, and this exemption applies whether or not the seed was grown in another state and shipped into Washington for storage.
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June 17, 1963
Honorable H. Maurice Ahlquist
State Representative, 11th District
Cite as: AGO 63-64 No. 31
You have requested an opinion of this office on questions which we paraphrase as follows:
1. At harvest time the farmer-producer delivers alfalfa seed to the warehouse of a processor. The seed is sold to the processor under contract subject to final clean-out percentages and is in his hands on January 1 next succeeding the harvest. You ask whether the seed is subject to taxation even though shipped out of the state on or before April 30 of that year.
2. Would the seed be taxable if in the warehouse on January 1 of the year next succeeding the harvest, but still in the ownership of the farmer-producer?
3. Would the fact that the seed was grown on a farm in another state and then placed in a Washington warehouse make any difference?
We answer the first question in the affirmative and the second and third questions in the negative.
[[Orig. Op. Page 2]]
By RCW 84.36.140, 84.36.150, and 84.36.160, an exemption from property taxes otherwise applicable is provided for certain grains and flour, fruits, vegetables and fish. To qualify for the exemption such products must, among other things, be shipped out of the state on or before April 30 of the first year in which they would otherwise be taxable.
To come within the exemption provided by RCW 84.36.140, alfalfa seed must be classified as either a "grain" or a "vegetable" as those terms are used and defined in chapter 84.36 RCW. The other two categories exempted are clearly inapplicable.
RCW 84.36.140 and RCW 84.36.160 both have reference to "grains and flour," and the latter statute provides that:
"The term 'grains and flour' shall mean and include all raw whole grains in their usual marketable state; and grain flour in the hands of the first processor; but not any other grain product."
This definition does not specifically indicate which commodities are to be considered grain and which are not, but it is clear from the fact that the word "grains" is used in connection with the word "flour" that the statutory provisions under consideration are applicable only to those grains which are ordinarily made into flour. Thus, "grain" as used in these statutes would include wheat, rye, oats, barley, corn and similar products, but would not include commodities not normally used for processing into flour, such as alfalfa seed.
Since alfalfa is a member of the pea family, it is arguable that the "vegetable" exemption appearing in RCW 84.36.140 is applicable. However, the term "vegetable" is defined in RCW 84.36.160 as follows:
"The term 'vegetable and vegetable products' shall mean and include all raw edible vegetables, such as peas, beans, beets, and other vegetables; and all processed products of vegetables, suitable and designed for human consumption, while in the hands of the first processor."
It is clear from this definition that only those vegetables which are edible, or suitable and designed for human consumption are within the "vegetable" exemption portion of the statute. Alfalfa seed is not [[Orig. Op. Page 3]] generally used, or considered to be usable in this manner, so even if alfalfa seed were deemed to be a vegetable product the exemption still would not be applicable.
It is therefore the opinion of this office that alfalfa seed is not one of those products qualifying for an exemption under RCW 84.36.140.
There is, however, another exemption which will apply under certain circumstances. RCW 84.44.060 reads in material part:
". . . All agricultural and horticultural products other than forest products, livestock and fowls, ownership of which remains in the original producer thereof on the first day of January next succeeding the harvesting thereof shall be exempt from assessment for taxation for the said year."
Under this statute the alfalfa seed would be tax exempt for the year next succeeding its harvesting if, on January 1 of that year it is still in the ownership of the farmer-producer. On the other hand if, under the terms of the contract of sale with the processor, title has passed out of the producer before that date, there is no exemption. Whether title passes is a matter of intent between the parties and each contract would have to be examined to determine that point.
In answer to your last question, we are of the opinion that the exemption afforded by RCW 84.44.060 would apply to agricultural products grown in another state and shipped into Washington for storage, provided the ownership remains in the original producer on January 1, following harvesting. Of course, the state of origin has no bearing on the exemption discussed in question one.
We trust the foregoing will be of assistance to you.
Very truly yours,
JOHN J. O'CONNELL
HENRY W. WAGER
Assistant Attorney General