Arizona Addresses Expanded Deduction for Sales of Propagative Materials

Jan 10th, 2020

The Arizona Department of Revenue recently published guidance about changes to the transaction privilege tax deduction for sales of propagative materials to commercial producers of plants, flowers, and food. The guidance explains that the term "propagative material" has been expanded to include seeds, seedlings, roots, bulbs, liners, transplants, cuttings, soil and plant additives, agricultural minerals, auxiliary soil and plant substances, micronutrients, fertilizers, insecticides, herbicides, fungicides, soil fumigants, desiccants, rodenticides, adjuvants, plant nutrients, and plant growth regulators. Note that the deduction applies to the commercial production of industrial hemp, but not to the production of cannabis. propagative materials deduction