It’s understood the shots may have been fired at a police patrol car.
No one has been physically injured in the incident.
Police made an emergency declaration under the Public Safety Preservation Act about 5.30pm (6.30pm AEDT), two hours after being called to reports of shots.
The exclusion zone includes Surat Development Road, Day Street, Benn Street, Fry Street and Milne Street.
“Several residents have been evacuated,” police said.
Read Related Also: 1.2 million Americans visit Mexico for ‘medical tourism’ each year
“Others within the exclusion zone are asked to remain indoors.
“No further information is available at this stage.”
Tara is about 15km south of Wieambilla, where two officers, Constables Rachel McCrow and Matthew Arnold, were killed in an ambush at a property in December.
Alan Dare, a neighbour of the property, was also killed in the shoot-out.
McCrow and Arnold were stationed in Tara when they were murdered in the shooting.
