Sales Tax for Cricket Farms: What You Collect and What You Owe

19 states exempt live animals (including crickets) from sales tax; 12 states treat cricket flour as a taxable prepared food. Those two numbers represent the core sales tax complexity for cricket farms: your obligations depend on what you're selling, where you're selling it, and what your state's rules say about your specific product category.

Sales tax for cricket farms varies by state and is a common compliance mistake. Operators who charge sales tax when they don't need to are overcharging customers. Operators who don't charge when they should are accumulating a liability that may eventually come due in an audit. Neither is a good position.

TL;DR

• Following the Supreme Court's 2018 South Dakota v
• Wayfair decision, states can require remote sellers to collect sales tax once they exceed economic nexus thresholds - typically $100,000 in sales or 200 transactions in a state in a calendar year
• About 12 states apply sales tax to what they classify as prepared foods or luxury food items, even when other grocery foods are exempt
• Request resale certificates from all B2B buyers before making your first sale to them
• Approximately 19 states exempt live animals from sales tax, which would cover feeder crickets sold to retail customers
• B2B sales to pet stores for resale are typically exempt under the resale exemption, provided the buyer gives you a resale certificate
• About 12 states tax prepared foods or specialty food items that might include cricket flour

States that tax live animals: Other states do not exempt live animals from sales tax and treat feeder crickets as a taxable product.

• Following the Supreme Court's 2018 South Dakota v.
• Wayfair decision, states can require remote sellers to collect sales tax once they exceed economic nexus thresholds - typically $100,000 in sales or 200 transactions in a state in a calendar year.
• For farms doing substantial online sales nationwide, review your sales volume by state annually.

Registration and Filing

Once you know you have sales tax obligations, you must:

1.

• Register with your state's Department of Revenue or equivalent agency

2.

• Collect sales tax at the applicable rate from taxable customers

3.

Live Crickets: Sales Tax Treatment by State

States that exempt live animals: Many states exempt live animals from sales tax on the theory that animals are agricultural products. Crickets, as live animals raised for sale, may qualify for this exemption in these states. The exemption typically applies to feeder crickets sold to pet owners (the consumer of the animal's services, in agricultural terms), though the classification can vary.

States with live animal exemptions (as of 2026, verify with your state): Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, Wyoming. Approximately 19 states.

States that tax live animals: Other states do not exempt live animals from sales tax and treat feeder crickets as a taxable product. If your state taxes live animals, you need to collect sales tax from retail customers.

Agricultural production exemption: Some states with live animal sales taxes exempt animals sold for agricultural purposes (breeding stock, livestock for slaughter). Feeder crickets sold to reptile owners for pet feeding purposes generally don't qualify for agricultural production exemptions - they're pet supplies, not agricultural inputs.

Cricket Flour: Sales Tax Treatment

Cricket flour's sales tax treatment depends on how your state classifies it:

Unprepared food (typically exempt): Most states exempt unprepared food - grocery items sold in their natural state - from sales tax. Plain cricket flour, sold as a food ingredient, may qualify as unprepared food in states with food exemptions.

Prepared food (typically taxable): If cricket flour is classified as a prepared food or specialty food ingredient, it may be taxable even in states that otherwise exempt food. About 12 states apply sales tax to what they classify as prepared foods or luxury food items, even when other grocery foods are exempt.

Dietary supplement classification: Cricket flour marketed as a dietary supplement or protein supplement may be classified as a taxable supplement rather than a food, depending on how your product is labeled and marketed.

B2B Sales: The Resale Exemption

When you sell cricket flour to a business that will resell it or incorporate it into products for resale (a bakery, a protein bar manufacturer, a pet food producer), the sale is typically exempt from sales tax under the resale exemption. Your buyer should provide you with a resale certificate (also called an exemption certificate) documenting their resale purpose.

Keep these certificates on file. If you're audited, they're your documentation that you didn't need to collect sales tax on those transactions. Request resale certificates from all B2B buyers before making your first sale to them.

Economic Nexus and Multi-State Sales

If you sell cricket products to customers in states where you don't have a physical presence, you may still have sales tax obligations. Following the Supreme Court's 2018 South Dakota v. Wayfair decision, states can require remote sellers to collect sales tax once they exceed economic nexus thresholds - typically $100,000 in sales or 200 transactions in a state in a calendar year.

For most small cricket farms making occasional out-of-state sales, economic nexus thresholds won't be triggered. For farms doing substantial online sales nationwide, review your sales volume by state annually.

Registration and Filing

Once you know you have sales tax obligations, you must:

1. Register with your state's Department of Revenue or equivalent agency
2. Collect sales tax at the applicable rate from taxable customers
3. File sales tax returns on the schedule your state requires (monthly, quarterly, or annually depending on your sales volume)
4. Remit the collected tax to the state on time

Late filing and late payment generate penalties and interest quickly in most states. Set up automatic reminders for your filing dates.

For your overall accounting approach, see cricket farm accounting guide. For your business compliance overview, see cricket farm compliance overview.

Frequently Asked Questions

Do I charge sales tax when selling feeder crickets?

It depends on your state. Approximately 19 states exempt live animals from sales tax, which would cover feeder crickets sold to retail customers. Other states tax live animals, including feeder crickets. Look up your specific state's rules for live animal sales tax treatment - search for your state's Department of Revenue website and look for their agricultural or live animal exemption guidance. If you're in a state that taxes live animals, you need to register for sales tax collection and charge it on retail sales. B2B sales to pet stores for resale are typically exempt under the resale exemption, provided the buyer gives you a resale certificate.

Is cricket flour subject to sales tax?

It depends on your state and how the product is classified. States with general food exemptions typically exempt unprepared food ingredients like plain cricket flour from sales tax. About 12 states tax prepared foods or specialty food items that might include cricket flour. If your cricket flour is marketed primarily as a dietary supplement or protein supplement (with supplement-style labeling), it may be classified as a taxable supplement rather than an exempt food. Check your state's specific food and supplement sales tax rules. When selling cricket flour to food manufacturers for use as an ingredient, the sale is generally exempt under the resale exemption with a proper exemption certificate from the buyer.

What states have a sales tax exemption for live insect feeders?

Approximately 19 states have live animal exemptions that would cover feeder crickets: Alabama, Alaska, Arizona, Colorado, Georgia, Idaho, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oklahoma, South Dakota, and Wyoming. However, state tax laws change, and the application of live animal exemptions to insects versus mammals may vary by state interpretation. Before relying on an exemption, confirm with your state's Department of Revenue or a tax professional familiar with agricultural business in your state. If you're in a state that taxes live animals, the sales tax applies to retail sales of feeder crickets to pet owners - B2B sales to retailers who resell are exempt with a resale certificate.

What financial records should a cricket farm maintain for tax purposes?

At minimum: purchase receipts for feed, equipment, and supplies; sales records with buyer identification; payroll records if you have employees; and documentation of any capital equipment purchases. Cricket farm income is treated as agricultural income in most US jurisdictions, which may qualify for specific Schedule F provisions. Work with a CPA who has agricultural industry experience to ensure you are capturing all applicable deductions.

How do I calculate my true cost per pound of cricket produced?

True cost per pound requires adding all variable and fixed costs for a production cycle and dividing by total harvested weight. Variable costs include feed, water, electricity, and packaging materials. Fixed costs include facility overhead, equipment depreciation, insurance, and software subscriptions. Many operations only track feed cost, which understates actual production cost and leads to underpricing when setting buyer contracts.

What accounting method should a small cricket farm use?

Most small cricket farms use cash-basis accounting, where income is recorded when received and expenses when paid. This is simpler than accrual accounting and is permitted for most farm operations under IRS rules. As your operation grows, an accountant may recommend accrual accounting to better match revenues with the production cycles that generated them, particularly if you carry significant inventory or receivables.

Sources

• Food and Agriculture Organization of the United Nations (FAO) -- Edible Insects: Future Prospects for Food and Feed Security
• North American Coalition for Insect Agriculture (NACIA)
• USDA Economic Research Service -- Agricultural Finance Statistics
• Internal Revenue Service (IRS) -- Publication 225: Farmer's Tax Guide
• Small Business Administration (SBA) -- Agricultural Business Resources

Get Started with CricketOps

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