Indiana Sales Tax Exemption for Farmers

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This article was submitted by Citizens for Government Accountability.

Indiana Sales Tax Exemption For Farmers Nothing More Than A Bait And Hook Scheme

With state revenues seeing a downturn the past few years, and state budgets being pinched, bureaucrats have had to come up with new ways to generate revenue to run the state, and pay themselves, at taxpayer expense, without calling for new taxes. The concept of downsizing bureaucracy in order to save taxpayer money, or simply doing more with less, are foreign thoughts to government officials. Small changes to state tax laws are usually done without the consumer knowing it, and are most often different in neighboring states.

ATV Purchases For Farmers

In Kentucky, as in most states, if you fill out the agricultural exemption form for state sales tax at time of purchase, and have Schedule F (farm) income, you are then exempt from paying the state sales tax. (we are not offering tax advice, consult with your cpa)

Buyers Beware In Indiana

In Indiana, even if you fill out the Indiana agricultural state sales tax exemption form at purchase, pay with a farm check, and file Schedule F on your taxes, you are still not exempt from their sales tax. The Indiana Department of Revenue will come back on you years later demanding the tax, plus penalty and interest.

Case In Point

(2006-00183559) In 2006 I drove north of the Ohio River and bought a new 4-wheeler in Indiana. The above paragraph is what happened to me. Three-and-a-half years later (Dec.’09), the Indiana Department of Revenue sent me a letter stating that even thought I filed their proper farm tax exempt form at purchase, and paid with a farm check, they felt I still owed the tax. I protested via their proper forms and sent a copy of my Schedule F. They replied they did not recognize the Schedule F because it was a federal form. They did give me a 26% credit against the tax. I protested via their protest law once again. I also sent via certified mail a copy of all letters sent to and from me by the Indiana Department of Revenue over 4 months (17 pages), to Governor Mitch Daniels. I got a response by mail 4-21-10 from his taxpayer liaison, but nothing of any substance.

Only A Bureaucrat Would Say That

The phone interview with the Indiana Deptartment of Revenue Attorney, Ms. Lena Snethen, during the first week of April 2010, concerning the tax hearing on my case yielded the following: I stated that I felt ‘slickered’ by this purchase and Indiana’s bait and hook tax policy for farm purchases. She replied that was an offensive term to her because it implied I had been tricked into buying something I would not have otherwise. I replied that is correct. Ms. Snethen then stated the following; “It is not the duty of the Indiana Department of Revenue to inform the consumer/taxpayer on Indiana tax law. Just to enforce the laws set forth by the state legislature.”

This is why no-one likes government officials (bureaucrats). Because no-one is accountable, or responsible for anything. Shouldn’t they require all sellers to hand a one page bold print copy of what the Indiana Dept. of Revenue will do under this law, even if you qualify, as ag-exempt. But then that would cause a big loss in customers buying in the State of Indiana.

Bureaucratic Machine And You

One problem with government is too many bureaucrats, most of which are lawyers. Unfortunately, most people think ‘their’ party (democrat or republican) have honest, better politicians than the other, that will fix things. Only a fool would believe something like that. Which is why this country is in the shape it is in. Even bureaucrats don’t want to pay their taxes. They know the level of corruption. They helped create it, and prosper from it.

While some fly planes into buildings, etc., once the bureaucratic machine has worn them down mentally. Then they are labeled as crazy by media reports. Frustrated, hopeless, desperate, and fed up is more accurate. Our goal here is to educate with the facts so people don’t fall into the above category. It takes more than just voting out the incumbents. It takes citizen involvement to bring about accountability from the bureaucrats that always remain in government no matter who is elected. As consumers, the best action is to not spend in states or with businesses where you are ‘sucker punched’ later.

Our Best Advice To Farmers

Do not buy a 4-wheeler, or utility ATV in the State of Indiana. Kentucky and Tennessee ag-exempt law is straightforward, and therefore easy to contend with, - no tricks.

Of Note

We have contacted Kentucky Farm Bureau to make them aware of this situation for farmers/ranchers. Hopefully, they will help educate their members on Indiana’s ag-sales tax situation, so farmers/ranchers considering their next ATV purchase will not get ‘hooked’ in Indiana.

Indiana State Officials Salaries: The following salaries were retrieved from the Indianapolis Star newspaper’s weblink. or then click data bases at bottom of page, then click “How much state employees paid?”

  • Gov. Mitch Daniels $95,000
  • Doug Klitze (dept. of Revenue) $69,012
  • Williamm B. Long (dept. of Rev.) $48,927
  • Lena Snethen (dept. of Rev.) $47,059

Indiana Access To Public Records Act: (I.C. 5-14-1.5-3) Indiana open records law allows for citizens to request documents, records, employee salaries, etc. State officials (office holders, or those authorized) have 7 days to respond to information requests, and can only charge for copies at a rate of 10 cents per black/white page. For further information go to or contact the Indiana public records access counselors office at 1-800-228-6013 or 1-317-233-9435