Trailers Used to Haul Farm Equipment Qualify for Farm Machinery Exemption in Kentucky

Thursday, August 16th, 2012


The Kentucky Department of Revenue (DOR) recently reversed its position on whether the sale of certain trailers used to haul farm equipment (known as "header wagons") are subject to tax. Informational Alert - Kentucky Revenue Department Reverses Taxation Status on Header Wagons (Ky. Farm Bureau Federation Jul. 19, 2012).

Kentucky exempts the sale of "farm machinery" and defines that term to include "machinery, attachments, and replacements . . . which are used or manufactured for use on, or in the operation of farm machinery and which are necessary to the operation of the machinery, and are customarily so used." Ky. Rev. Stat. Ann. sec. 139.480(11). Kentucky specifically excludes "automobiles, trucks, trailers, and truck-trailer combinations" from this exemption. The DOR had previously stated that it did not consider header wagons to be farm machinery, so sales of header wagons were taxable. However, the DOR has now explained that because header wagons are specifically designed to carry farm equipment they qualify for Kentucky's sales tax exemption for farm machinery.

Anyone who has previously paid sales or use tax on the purchase of a header wagon during the past four years will be eligible for a full refund on taxes paid during that time. For additional information, please contact the Kentucky Department of Revenue, Sales and Use Tax Division at (502) 564-4581.

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