Motor vehicles that are required to be licensed are almost always taxable, but there are a few specific exemptions for farmers and ranchers.
These vehicles qualify for the exemption
Farmers and ranchers can buy a vehicle exempt if it:
- Isn’t licensed and it’s used exclusively in qualifying farming activities.
Example: A truck used to feed livestock, and never driven on public roads. - Isn’t required to be licensed and is used in qualifying farming activities.
Examples:- Farm tractor
- Harvester
- Cultivator
- Reaper
- Binder
- Combine
- Planter
These vehicles don’t qualify for the exemption
- Vehicles that are licensed
Examples:- Any motor vehicle that must be licensed for use on public roads. This includes vehicles with restricted-use plates and recreational-use stickers.
- Recreational vehicles and recreation-related vehicles
Examples:- Snowmobiles
- Off-highway motorbikes
- ATVs
- Motorcycles
- Motor homes
- Park model recreational vehicles
Buying an exempt motor vehicle
To buy a qualifying vehicle exempt:
- Give the seller a completed
Form ST-101 – Sales Tax Resale or Exemption Certificate. - Give the completed exemption certificate to the Department of Motor Vehicles (DMV) office when you title the vehicle. Don’t license the motor vehicle for use on the highway, or the exemption won’t apply.
EXAMPLE
You buy a truck from a dealer. When titling the vehicle, you claim the production exemption. No sales tax is collected. You later go to a different DMV office and license the same truck. You now owe tax on the value of the vehicle.