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TAX INFORMATIONFOR FARMERSSTATE and LOCALSALESandUSE TAXEvery effort has been made to assure theaccuracy of the information herein. However, tothe extent that anything expressed herein maybe inconsistent with statute, regulations, caselaw or binding letter rulings, this publication isnot binding on the Department of Revenue.www.revenue.pa.govREV-1729 (SU) 10-21

TABLE OF CONTENTSFARMINGPageWhat is Farming . . . . . . . . . . . . . . . . . . . . 3sales tax: What is taxable . . . . . . . . . . . 3exemption CertiFiCates . . . . . . . . . . . . . . 4Use tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 4motor VehiCles . . . . . . . . . . . . . . . . . . . . 5motor FUels taxes . . . . . . . . . . . . . . . . . . 5motor Carriers road tax & iFta . . . . . . . 6FARM DEALERSsales tax . . . . . . . . . . . . . . . . . . . . . . . . . 7hoW to obtain a liCense . . . . . . . . . . . . . 7tax retUrns . . . . . . . . . . . . . . . . . . . . . . . 8eleCtroniC Filing . . . . . . . . . . . . . . . . . . 9eleCtroniC FUnds transFer (eFt) . . . . . . 9tax exemptions . . . . . . . . . . . . . . . . . . . 10AGRICULTURAL SERVICESanimal and poUltry Feed . . . . . . . . . . . . 10list oF taxable andnontaxable items . . . . . . . . . . . . . . . . . . 11MISCELLANEOUS INFORMATIONtax rate Chart . . . . . . . . . . . . . . . . . . . . 191

CUSTOMER SERVICES& TAXPAyER ASSISTANCE General Informationonline Customerservice Center . . https://revenue-pa.custhelp.comCustomer service Center, includingsales taxability questions . . . . . . . . (717) 787-1064FaCt &information line . . . . . 1-888-pataxes (728-2937)service for taxpayers withspecial hearing and/orspeaking needs (tt only) . . . . . . . 1-800-447-3020For district office locations and information pleasevisit our website. Electronic Filinginternet Filing – e-tides . . www.etides.state.pa.ustelephone Filing – teleFile . . . . . . 1-800-748-8299e-business Unit . . . . . . . . [email protected] Forms Orderingall forms mentioned in this booklet are availableon the department’s website for download atwww.revenue.pa.gov or from our 24-hour Formsordering message service by calling 1-800-362-2050.taxpayers may also request tax forms by writing to:pa department oF reVenUetax Forms serViCe Unit1854 brookWood streetharrisbUrg pa 17104-2244rules and regulations . . . . . . . . . www.pacode.comGo paperless byregistering on the Internetwww.PA100.state.pa.us2

This booklet provides Pennsylvania farmers andthose selling to farmers, a guide to the application ofsales and use tax.Specific questions on statutory interpretation in thisbooklet may be addressed to the Office of ChiefCounsel, PA Department of Revenue, PO BOX281061, Harrisburg, PA 17128-1061.WHAT IS FARMING?the following activities, when conducted as a regularbusiness, are considered farming:A. Production of Food Products for HumanConsumption the production of food crops and breeding andraising of livestock, bees and poultry. the production of vegetables, vegetable plants,fruits or nursery stock. the propagation of game birds for commercialuse by holders of propagation permits. the propagation of fish or other aquatic animalsfor commercial use as a food or food by-product.B. Production of Nonfood Products the production of flowers, trees (includingChristmas trees) plants and shrubs in the field,nursery or greenhouse. the propagation of furbearing animals (notpets). the propagation and raising of horses to be usedexclusively for commercial racing activities.SALES TAX: WHAT IS TAXABLE?generally, the purchase of tangible personal property to be used predominantly and directly in farmingoperations is not subject to sales tax. also, the purchase of repair and replacement parts for machineryand equipment used directly in farming operations,and the labor charge for installation of such parts, isnot subject to sales tax. Foundations used to supportmachinery, equipment and parts directly and predominantly used in farming are also exempt fromtax. tangible personal property purchased to construct, repair or maintain real estate or farmequipment is subject to tax. real estate includesbuildings such as houses, garages, barns,3

greenhouses, storage facilities, roads, dams, spillways and fences, but does not include piping forirrigation or for livestock water supply, nor does itinclude drainage tiling. administration; selling andmarketing; exhibiting safety activities; and land conservation programs are not considered farmingactivities. items purchased for these purposes aresubject to sales tax, as are services supplied by ahelp supply vendor.TAX EXEMPTION CERTIFICATESWhen purchasing items of tangible personal propertyor services that are considered tax exempt, thefarmer must complete a pa exemption Certificate(reV-1220) for the supplier. Farmers are notrequired to obtain a sales tax license number or submit a sales tax license number to a supplier prior toreceiving a sales tax exemption on purchases of taxexempt tangible personal property directly used infarming operations. one exemption certificate maycover several purchases.USE TAXif sales tax is not paid by a farmer -- for examplewhen a farmer purchases supplies from an out-ofstate supplier that are subject to pennsylvania salestax and the supplier does not collect the pennsylvania tax -- use tax is owed to the department. theuse tax rate is the same as the sales tax rate, 6 percent. an additional 1 percent local use tax applies toitems purchased or used in allegheny County; 2 percent local tax applies to items purchased or used inphiladelphia. Use tax applies to the total purchaseprice, including delivery charges.Use tax liabilities must be reported and paid withinthe first 20 days following the month of the first taxable use in pennsylvania. if a farmer has a sales taxlicense, the use tax must be reported and paid whenthe sales and use tax return is filed.if sales tax in an amount less than 6 percent is paidto another state, the difference between the ratepaid and 6 percent must be reported and paid topennsylvania as use tax. additionally, local tax is dueif the purchase is used in philadelphia or alleghenycounties.4

MOTOR VEHICLESagricultural vehicles, which are required to be registered under the Vehicle Code for highway use, aresubject to sales tax. the purchase of all trucksintended by the purchaser to bear commercial orfarm truck registration plates is subject to sales tax.all-terrain vehicles (atV's) that are required to beregistered with the department of Conservation andnatural resources (dCnr) are subject to sales tax,except for atV's that qualify as a multipurpose agricultural vehicle. a multipurpose agricultural vehicleshall mean a motor vehicle exempt from registrationin accordance with 75 pa. C. s. § 1302(17) which isused exclusively for agricultural operations and onlyincidentally operated or moved upon the highways.the multipurpose agriculture vehicle must be operated for the benefit of or pursuant to the operationof a farm owned or operated by the owner of thevehicle or a business whose enterprises and activities are considered part of farming.MOTOR FUELS AND MOTOR CARRIERTAXESI. Motor Fuel Taxes:A. Tax:the oil company franchise tax is imposed on gasoline, gasohol, undyed diesel fuel and undyedkerosene. the tax rates are subject to change yearlybased on the average wholesale price of productssold in pennsylvania. For current rates, visit thedepartment’s website at www.revenue.pa.gov orcall 1-800-482-4382.B. Refunds:Farmers are liable for the payment of the oil company franchise tax on the purchase of gasoline,gasohol, undyed diesel or undyed kerosene. the taxpaid on such fuel used in farm machinery for the production of farm products can be reimbursed to thefarmer upon submission of a claim for refund to:Commonwealth of pennsylvania, board of Financeand revenue, 1101 south Front st., suite 400, harrisburg, pa 17104-2539. Claims are submitted forthe fiscal year July 1 to June 30 and must be receivedby the board of Finance and revenue on or beforethe following sept. 30. to obtain the proper claimform, a farmer must register with the board by letter,providing his full name and address.5

the board will mail the claim forms annually. theclaim form must be completed -- including receiptsverifying the tax was paid -- and then returned tothe board of Finance and revenue at the aboveaddress.C. Dyed Diesel Fuel and Dyed Kerosene:Whenever dyed diesel fuel and dyed kerosene arepurchased in pennsylvania, they are purchased freeof liquid fuels and fuels taxes. Farmers are permittedto: purchase and use high sulfur dyed diesel/kerosene in diesel-powered farm equipment thatis used exclusively off-highway. For example:farm tractors, harvesting equipment, etc. purchase and use low sulfur dyed diesel/kerosene in diesel-powered farm equipment andin trucks used on and off highway that carry acurrent biennial certificate of exemption, as provided under section 1302 (10)(iii) of the VehicleCode.a diesel-powered truck bearing a farm vehicle registration must use undyed diesel/kerosene to operateon public highways.II. Motor Carriers Road Tax (MCRT) andthe International Fuel Tax Agreement(IFTA):Vehicles subject to mCrt/iFta are qualified motorvehicles which include: a power unit with two axles and a registeredgross weight greater than 26,000 pounds; a power unit with three or more axles regardlessof weight; and a combination where the declared combinationweight exceeds 26,000 pounds or where thevehicles used in combination (truck and trailer)exceeds 26,000 pounds.Qualified motor vehicles do not include recreationalvehicles such as motor homes, pickup trucks withattached campers and buses when used exclusivelyfor personal pleasure by an individual. in order toqualify as a recreational vehicle, the vehicle may notbe used in connection with any business enterprise.A. MCRT:any person operating a qualified motor vehicle6

exclusively in pennsylvania must credential the vehicle at a cost of 12/vehicle. the carrier must displaypa non-iFta decals on both sides of the vehicle andcarry a mCrt registration card in the vehicle. a farm truck registered vehicle bearing a farmtruck plate and operated within restrictions ofthe Vehicle Code § 1344 is exempt from theserequirements. a truck exempt from registration as a farm truckthat is operated on a biennial exemption certificate as provided under § 1302 (10) (iii) is alsoexempt from these requirements.B. IFTA:any person operating a pa based qualified motorvehicle in pennsylvania and any other state mustcredential the vehicle at a cost of 12/vehicle. thecarriers must display an iFta decal on both sides ofthe vehicle and carry an iFta license, or a legiblecopy thereof, in the vehicle. Farm vehicles asdescribed above are not exempt from the iFta credentialing requirement or the base state quarterlytax reporting requirement.FARM DEALERSSales TaxPersons Required to be Licensed: every person,association, fiduciary, partnership, corporation orother entity engaged in making taxable sales of tangible personal property or services must be licensedwith the department. sales include leasing or rentingof tangible personal property and the rental of hotelrooms.How to Obtain a Sales Tax License: prior to making taxable sales, rentals or leases, one must applyfor a license with the pa department of revenue.registration can be completed online atwww.pa100.state.pa.us.if an owner maintains more than one place of business in pennsylvania, a copy of the license will beissued for display at each location. licenses will onlybe issued or renewed to applicants that filed allrequired tax returns and paid all taxes due. licensesare automatically renewed every five years.Collection of Tax: tax must be collected at the timeof sale of property unless the sale is on credit. tax7

on credit sales must be collected within 30 days fromthe date of the sale. a seller is liable for reportingand remitting tax with the tax return covering theperiod in which either a taxable purchase was madeor tax should have been collected. the seller may beassessed for failure to collect tax.Purchase Price: tax is to be collected on the fullpurchase price without deduction of charges forlabor, handling, delivery or installation. separatelystated charges clearly designated as deposits forreturnable containers transferred to the ultimateconsumer of the product are not subject to tax.however, if the deposit is designated as a rental, thecharge is subject to tax.Tax Rate: the 6 percent state sales tax is to be collected on every separate taxable sale in accordancewith the tax table on page 19. an additional 1 percent local tax applies to items purchased or used inallegheny County; 2 percent local tax applies toitems purchased or first used in philadelphia.Tax Returns: Upon registration, the departmentprovides sales tax licensees with a schedule forreporting periods within a calendar year. no licenseeshall be excused for failure to report and pay the tax.tax returns must be filed for every reporting period,even if no tax is due.Filing FrequenciesMonthly Returns with Prepayment Obligations:LEVEL 1licensees whose actual tax liability is 25,000, butless than 100,000 per quarter, must pay 50 percentof the tax liability for the same month of the preceding calendar year or remit at least 50 percent of theactual tax liability required to be reported for thesame month in the current year.LEVEL 2licensees whose actual tax liability is 100,000 ormore per quarter, must pay 50 percent of the tax liability due for the same month of the preceding calendar year.Prepayment Due Datesprepayments are due by the 20th of the currentmonth; returns and remaining liabilities for the periodare due the 20th of the following month.8

Monthly Returnslicensees whose actual tax liability is less than 25,000, but greater than 600 per quarter, must filemonthly. monthly returns are due the 20th day of themonth following the end of each calendar month.Quarterly Returnslicensees whose actual tax liability is less than 600per quarter, but greater than 300 annually, must filequarterly. Quarterly returns are due the 20th day ofthe month following the end of each calendar quarter.Semi-Annual Returnslicensees whole actual tax liability is 300 or less annually, must file semi-annually. semi-annual returnsare due august 20th for the January to June periodand February 20th for the July to december period.Electronic Filing e-TideS (Electronic Tax Information and DataExchange System): e-TIDES is a business tax filingsystem available free of charge to all registeredsales and use tax account holders. sales and usetax returns and payments can be made throughe-TIDES by accessing www.etides.state.pa.us. TeleFile: teleFile is a fast and secure way to fileand pay sales and use tax by phone. Call, tollfree, 1-800-748-8299 using a touch-tonetelephone. Third-Party Vendors: approved third-partyvendors provide for secure transmission for filingand paying sales and use tax. Visitwww.revenue.pa.gov to learn more about thiselectronic filing option.Electronic Funds Transfer (EFT): all businessesare encouraged to explore this electronic paymentoption. taxpayers remitting payment of 1,000 ormore are required to do so by electronic funds transfer (eFt). Failure to make such payment by an approved eFt method may result in the imposition of apenalty of 3 percent of the tax due, up to 500.all tax documents are still required to be filed evenwhen payments are made through eFt.to register, visit www.etides.state.pa.us.9

Tax ExemptionsCooperative Agricultural AssociationsCooperative agricultural associations, which arerequired to pay corporate net income tax, areexempt from the payment of sales and use tax onpurchases of tangible personal property and services. however, the exemption does not apply to thepurchase, lease, repair or the maintenance serviceof any motor vehicle required to be registered underthe provisions of the Vehicle Code.the exemption does not pass to a construction contractor who, pursuant to a construction contract witha cooperative agricultural association, is required topurchase materials, supplies or equipment installedso as to become part of the real estate.Timberingtimbering operations that include producing or harvesting trees from forests, woodlots or tree farms forthe commercial production of wood, paper or energyproducts derived from wood by a company primarilyengaged in the business of harvesting trees are notsubject to sales tax. timbering does not include theharvesting of trees for clearing land for access roads.AGRICULTURAL SERVICESPERFORMED FOR FARMERSAnimal and Poultry Feedindividuals or businesses dealing in the preparationof animal or poultry feed for farmers will fall into oneof the following categories: those predominantly engaged in the business ofpreparing their own animal or poultry feed forsale qualify for sales tax exemption as a processor. grinding and mixing equipment, notincluding vehicles to transport the equipment,may be purchased free from tax by filing a properly completed exemption certificate with thevendor. those predominantly engaged in the business ofpreparing animal or poultry feed belonging toanother (individual or business) do not qualify asa processor. therefore, their purchases of equipment and vehicles to transport the equipmentare subject to sales and use tax.10

LIST OF TAXABLEAND NONTAXABLE ITEMST – taxable: items not normally used directly infarming.NT – nontaxable: items that normally are useddirectly in farming.NOTE: For items not normally used directly in farming that were purchased tax-free, a farmer shouldnotate the invoice reflecting the reason for exemption, and maintain the invoice and exemptioncertificate.t – acetylenent – air compressorsnt – air conditioning, if used to preserve farmproducts prior to packaging (taxable ifused primarily for the comfort of farmpersonnel or to preserve the farm product after the final packaging operation)nt – air tanksnt – alternator (auxiliary) if used to operatefarm equipmentnt – anhydrous ammonia tanks and fittingsnt – artificial insemination equipment andsupplies, if used for the breeding of productive animalsnt – augersnt – automated milking equipmentnt – balersnt – barn cleanersnt – bedding for productive animalsnt – beekeeper supplies and equipmentincluding, but not limited to bees, beehives and wax foundationsnt – bindersnt – blacksmith/farrier services for commercial racehorses or horses used directly infarmingnt – blankets when used to preserve thehealth of productive animalsnt – blowersnt – boarding of animalsnt – boots11

––––––––t –t –t –nt –nt –nt –nt –ntttnt––––t –12breeding services for productive animalsbroodersbrooms, general cleanlinessbrooms, used to clean mushroom bedsbucketsbuckets for handling farm productsbuilding supplies, including, but notlimited to materials to build barnsbulbs for plantingCabinetsCabs installed on farm tractorsCalf weanersCans, feedingCattle currying and oiling machinesCattle feedersCattle chutes (portable)Cement, if used to construct liquidmanure pits, silo flooring and foundationsfor exempt machinery and equipmentCement, if used for other than aboveChain hoists used as maintenance equipmentChain saws (Chain saws are considerednontaxable only if used by a sawmilloperator or planing mill operator for thepurpose of cutting or hauling logs.)Chemicals used for pest control or to cleanand sterilize exempt farm equipmentChicken pickersCleaners and disinfectants used in cleaning milking equipment and to sterilizemilk cans to prevent spoilage. propertyused for general farm cleaning and maintenance is taxable.Clippers or clipping machines for use onproductive animalsCombinesComputersComputer software, cannedContainers: non-returnable wrapping supplies used for delivery of any personalpropertyContainers: milk, reusable

nt – Conveyors (elevators, hay and grain,self-generated)nt – Corn crib (portable)nt – Corn pickersnt – Corn shuckersnt – Coverallsnt – Crates, fieldnt – Cultivatorsnt – Cutter, ensilagent – debeakers for productive animalsnt – defoliantsnt – dehorners for productive animalsnt – disinfectantst – dozer blades for land reclamationnt – dragsnt – drainage pipet – drills for repair and maintenance activitiesnt – drugs and medicines for animals, birds orfishnt – drying machines for grainnt – dustersnt – dusting compoundst – educational materialsnt – egg candling, collecting, washing andprocessing equipmentt – electric fence chargersnt – electric insect killers, if intended for usein an area in which farm animals or products are storednt – electricity to operate farm equipment orinterior barn lightingt – electricity for operating exterior lightingt – equipment and supplies for home use orpersonal usent – equipment used to extract a productfrom productive animals or from the soilnt – Feed and feed additives for productiveanimals, game birds or fisht – Feed for the raising of non-productiveanimals for hunting or zoosnt – Feeding equipment, including, but notlimited to bowls, buckets, cans, carts,13

tntntnttntnt–––––––t –nt –nt –t –nt –nt –t –nt –nt –nt –nt –t –ntntntnttnt––––––nt –14tubs, food scoops, grinders and wateringdevices for productive animals or gamebirdsFencingFertilizer distributorsFertilizers and chemical additives for soilField sprayersFire prevention and safety equipmentFirewoodFish hatchery stock and feed when apropagation permit is heldFlowersFork liftsFuel oil for use in heating poultry brooders, incubators and greenhousesFuel oil tanksFumigation services upon agriculturalcommodities or containers used for agricultural commoditiesFungicidesgarden tractors, unless used in the farming operationgenerators (auxiliary) only if they provide emergency service to preventspoilage of foodglovesgraders used to grade eggs, vegetablesand fruitgrain bins, both permanent and portable,if used predominantly to store farm selfgenerated grain for productive farmanimals, game birds or fishgrain bins, if predominantly used to storepurchased grain or grain for salegrain drills used for seeding farm landgrain elevators (portable)grain plantersgrating for hog pen flooringgreenhousesgrooming materials, equipment and supplies when necessary for the health ofproductive animalsgrowing media (artificial)

t – guns and ammunitionnt – harnesses used to control productive animalst – harnesses used for exhibition or transportation purposesnt – harrowsnt – harvestersnt – hay conditionersnt – hay mowersnt – hay racksnt – hay rakesnt – hay teddersnt – hay windrowerst – heaters for milk house, including waterheaterst – help supplynt – herbicidesnt – hog feedersnt – hoof trimmers for productive animalsnt – hormones for productive animalst – horsefeednt – husking machinesnt – hydraulic hoist installed on a vehiclent – icent – incubatorsnt – insecticides for use on cropsnt – irrigation pipes and pumpst – lanternsnt – light bulbs for chicken coopst – light bulbs for general lightingnt – liment – livestockt – log splitters and timber equipmentt – lumbert – maintenance facilities including tools,machinery and equipment to maintainmachinery, equipment or propertynt – manure handling equipment, including,but not limited to spreaders, front-endloaders and scrappersnt – manure storage tanks15

nt – medicines, serums, and solutions used inthe care of animals, birds or fisht – milk cansnt – milk strainers, strainer discs and towelst – milk strainer dispensers, strainer discsdispensers and towel dispensersnt – milk tanks, bulknt – milking machines, including pipingnt – mowers, haynt – mulchesnt – multipurpose agricultural vehicle (atV),when used exclusively for farmingnt – mushroom equipment, machines andpartst – mushroom housest – nailsnt – nests, poultry (portable)nt – nursery equipment, machines and partst – office supplies and equipmentt – oilerst – oxygennt – pailst – paint and paint supplies, general usent – paint and paint supplies for use onexempt equipmentnt – pallets and pallet boxnt – paper towels for washing udders of cattlent – peat mossnt – pens (portable)nt – pest Control services for agriculturalservicesnt – pesticidet – pet foodnt – picking equipmentnt – pipes to supply water to barn or to waterproductive animals, game birds or cropsnt – pitchforknt – plantersnt – plantsnt – plowst – post hole diggers16

nt – poultry house equipment, including, butnot limited to nests, feeders and waterersnt – productive animalsnt – pruning equipmentnt – pumps for use in farm irrigation or watering productive animals or game birdst – radiosnt – refrigeration or cooling equipment usedto store and preserve farm productst – road maintenance equipmentnt – rodenticidesnt – root plantersnt – rotary hoesnt – sacks and bags when used as wrappingsuppliest – safety equipment, unless worn by production personnelnt – salt blocks for use by productive animalst – sandersnt – saw dust and wood chips used for animalbeddingt – scalesnt – seeds and seedersnt – semen used for the breeding of productive animalsnt – serums for use on animals, birds or fishnt – shovelsnt – silage unloadernt – silost – snow plows and equipmentnt – soil conditionersnt – sprayers used to clean eggs, chickens,etc., prior to packagingnt – stalls for productive animalsnt – stanchionsnt – steel bodies mounted on farm wagons todry hay by portable dryersnt – stone pickersnt – storage tanks for manuret – stud fees except where the animals aredirectly used in farm operationst – tanks, fuel oil17

nt – tarpaulins to protect or preserve farmproductsnt – threshersnt – tiest – tire spreadersnt – tires used on agricultural implementst – tires used on nonagricultural implementsnt – tobacco seed and tobacco papert – toilets, fieldt – toolsnt – topsoilnt – tractors and accessoriesnt – troughnt – tubsnt – twinent – Vaccines for animals, birds or fishnt – Ventilation fans and equipmentnt – Veterinarian services for animals, birdsand fishnt – Washers for fruit, vegetable and eggt – Water heater for cleaning dairy equipment and suppliesnt – Water testingnt – Watering devicesnt – Waxers for fruits and vegetablesnt – Weaners for productive animalsnt – Weed spray used to protect farm cropst – Welding equipmentnt – Welding rods for use in repairing exemptfarm equipmentnt – Wheelbarrowst – Windowsnt – Wire for bailingt – Wire for fencingt – Wood stovest – Wrenches for maintenance activities18

SALES AND USE TAX RATES6% RATESFrom .50.51.52.53.54.55.56.57.58.59.60AmountTax 0003000 4.0030.0036.0042.0048.0054.0060.00120.00180.00If the purchase price is more than 10, 6 percent and 1 percent or 2 percent county tax (if applicable), of each dollar plus the above bracketcharges upon any fractional part of a dollar must be collected.reV-221 as (11-09)CONTINUED PAGE 2019

SALES AND USE TAX RATES1% RATESFrom 3.04.05.06.07.08.09.10From 6.767.267.768.268.769.269.76(Continued)2% 19.20

www.revenue.pa.gov

philadelphia. Use tax applies to the total purchase price, including delivery charges. Use tax liabilities must be reported and paid within the first 20 days following the month of the first tax-able use in pennsylvania. if a farmer has a sales tax license, the use tax must be reported and paid when the sales and use tax return is filed.