(a) The sale of a taxable item is exempt from the taxes imposed by this chapter if:
(1) the seller or retailer is a county fair association or another nonprofit organization that is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt organization in Section 501(c)(3) of that code;
(2) the sale takes place at a county fair operated by a county fair association on property owned by the county; and
(3) the purchaser is a person attending or participating in the fair.
(b) In this section:
(1) “County fair association” means an organization that is exempt from federal income taxation under Section 501(a), Internal Revenue Code of 1986, by being listed as an exempt organization in Section 501(c)(3) of that code and that organizes a county fair that is primarily for the exhibition of local horticultural or agricultural products or livestock. The term does not include:
(A) an association that holds a license issued after January 1, 2001, under Subtitle A-1, Title 13, Occupations Code (Texas Racing Act); or
(B) an association that organizes events other than a county fair, including an exhibition of arts and crafts or a state fair.
(2) “Livestock” includes turkeys, domesticated fowl, cows, sheep, swine, horses, mules, donkeys, and goats. The term does not include domesticated animals such as dogs, cats, guinea pigs, hamsters, or other similar animals.