Easier Tax Break for Farmers on ATV's

May 28, 2015

It would be easier for farmers to receive a sales tax exemption on off-road vehicles under a bill still eligible for passage by the 2015 legislature. 

Farmers get a sales tax exemption for machinery and equipment used for farming, including ATV’s.    But the law says the vehicle must be used directly for production agriculture.  

Victoria Daniels at the Department of Revenue says by law you can’t use the vehicle  “in preparation for or subsequent to” agricultural production.   She says that’s hard to enforce.

“From a farmer’s perspective, this is what I do,” Daniels says.   “This is farming.”    

For example, fixing fence might not count for a soybean producer. 

The bill would make the purchase eligible as long as it’s used mostly for farming, and not for fun.  

Daniels says it’s hard for farmers to qualify even if they use an ATV to get into a field they couldn’t otherwise enter.  

“We end up with a lot of protests,” Daniels says.  “We see constituent complaints coming from the House and Senate and Governor’s office.”

Some of the protests have ended up in court.   Daniels says the Department is spending more resources handling complaints than the tax is worth.  

Under the bill, the vehicle would be tax-exempt if it’s used at least 51% for farming.  

State lawmakers have completed work on most bills but they can’t adjourn until an agreement is reached on next year’s budget.   The ATV bill is exempt from statehouse deadlines because it deals with taxes.