When does the ag sales tax exemption apply for ATVs?

Do ATVs and utility vehicles fall under the sales tax exemption for agriculture? It depends, according to Leah Curtis, Ohio Farm Bureau’s director of agricultural law.

Under Ohio law, the agricultural sales tax exemption applies to most items that will be directly used, consumed or incorporated in the production of agricultural products for sale.

“ATV and utility vehicles are more tricky, and there tends to be more questioning of those purchases (by the tax department),” Curtis said.

Examples of when the ag sales tax exemption applies:

  • Distributing seed or fertilizer on a row-crop farm
  • Checking or fixing fences on a cattle operation
  • Accessing timber plots to haul out brush on a timber farm.

Examples of when the exemption does not apply:

  • Landowners using the vehicle primarily for recreation
  • Landowners who are renting out farmland but are not themselves involved in agricultural production.

If there is a dispute over the sales tax, the tax department will send a letter asking for more information about how the landowner is using the vehicle for agricultural production and then send a follow-up letter with its determination. Landowners can appeal that decision with the tax department. If it reaches the tax appeals board level, Curtis suggests landowners hire an attorney to make sure they have all the necessary documentation.

If a farmer believes a retailer collected sales tax in error, there is a process to file for a refund with the state of Ohio. Go to ofb.ag/Jan2016BFN for information on this process.

Listen to an episode of “Legal with Leah” on this topic and others here.

“Legal with Leah” is a part of Ohio Farm Bureau’s online Ohio Landowner Toolkit. Ohio Farm Bureau works to provide landowners with the information to help manage their property and to stay up to date on rural issues. Owning land comes with special responsibilities, and Ohio Farm Bureau is here to help.  Members can download the Ohio Landowner Toolkit and access other bonus online content.

Published in the January/February 2016 issue of Buckeye Farm News.