Indiana – Limitation on Exemptions for Agricultural Equipment

SALT Report 3190 – The Indiana Department of Revenue published a Letter or Findings (LOF) in October 2013.  The taxpayer, a land owner who purchased a tractor was not entitled to an agricultural exemption for use tax even though “he prepares the field for [his] tenant farmer, who plants and harvests crops, such as corn and soybeans.”

“As a threshold issue, all tax assessments are prima facie evidence that the Department’s claim for the unpaid tax is valid; the taxpayer bears the burden of proving that any assessment is incorrect.”

The basis for the rejection was that the tractor “was used after and/or before the direct production of the agricultural commodity, i.e., not during the direct agricultural production process.  Thus, the Tractor did not have a direct effect upon the commodity.”

For Further Information:              

Letter of Findings: 04-20130283