1. (a) The gross receipts or gross proceeds derived from sales of raw products, including Christmas trees, produced or grown at a farm, orchard, or garden in Arkansas are exempt from tax if:

   1. (1) The sale of such products is made by the producer directly to the consumer; and

   2. (2)

      1. (A) The sale is not from an established business located off the farm.
      2. (B) Farmers’ markets that operate from an established place off the farm or in an established manner off the farm are deemed to be established businesses.
      3. (C) Products sold at farmers’ markets off the farm are not eligible for the exemption.
2. (b) Grass sod is not a raw farm product, and the gross receipts or gross proceeds derived from sales of grass sod are taxable.
3. (c) Sales of flowers or nonedible trees, shrubs, or plants by florists or nurserymen are not exempt from tax.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-52-401(18)"