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12/03/2020 11:18 AM
Pennsylvania State Senate
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=S&SPick=20190&cosponId=30843
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Senate of Pennsylvania
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: January 6, 2020 03:03 PM
From: Senator Kim L. Ward
To: All Senate members
Subject: Preserving the Sales Tax Exemption for Multi-Purpose Agriculture Vehicles
 
In the near future, I plan to introduce legislation to clarify how farmers can qualify for sales tax exemptions for off-road vehicles used in farming operations.

Farmers currently qualify for sales tax exemptions on these vehicles, known as multi-purpose agriculture vehicles (MAVs). MAVs are off-road vehicles commonly used by farmers traveling between fields, for hauling small equipment, and other routine farm tasks.

It is primarily the way that these vehicles are used—not the type of vehicles themselves—that allow farmers to qualify for sales tax exemption. And here lies the problem. Unfortunately, the Pennsylvania Department of Revenue has been subjecting farmers to sales tax audits in which it is claiming farmers are not using these vehicles for actual farming practices, and requesting that they pay sales tax—with penalty.

For instance, a farmer, when questioned by auditors at Revenue, asserted he was using the MAV to help repair fences. Revenue staff then claimed repairing fences was not directly related to farming and ordered him to pay back sales tax. This is just one example of where the department is insisting that common farm tasks are not directly related to farming.

My legislation would clearly ensure that farming activities would not be as narrow as DOR is now considering them. By giving a more common sense definition of farm activities, fewer farmers will be subject to these needless audits.

In order to qualify for the sales tax exemption, farmers will still have to demonstrate to dealers that they are engaged in the business of farming. Farmers will still have to present a sales tax exemption certificates at the point of sale.

I hope you will join me in sponsoring this important legislation.



Introduced as SB1041