If our Support Heroes had a nickel for every time they heard this question, they’d all be flying private jets right now!
And that question is: Can I file my vehicle as an agricultural vehicle?
Depending on your vehicle type and how you use it, the tax rates and filing requirements vary. This is just one reason why it’s so important to categorize your taxable vehicle correctly when filing your HVUT Form 2290.
We recently discussed the different requirements for logging vehicles, which are vehicles used solely for the transport of forested materials. Logging vehicles are taxed at a lower rate than typical heavy vehicles, so if you drive a logging truck, be sure the check “used for logging” to be taxed at the lower rate!
Another type of taxable vehicle with special requirements is the agricultural vehicle.
Agricultural Vehicles & Higher Mileage Limits
Vehicles typically required to file HVUT are those with a taxable gross weight over 55,000 lbs and that travel over 5,000 miles on public highways throughout the tax period.
BUT to give farmers a break, the IRS made the requirements a bit more lenient for vehicles used in agriculture. Agricultural vehicles, regardless of their weight, are allowed to drive up to 7,500 miles on public highways each year before having to pay any tax at all!
Just to clarify, this does not mean that you don’t have to file HVUT at all. If your gross vehicle weight is over 55,000 pounds, you must still file HVUT and receive a stamped Schedule 1. However, if your agricultural vehicle will drive fewer than 7,500 miles throughout the tax year, you will owe zero tax when you file! This is known as filing a Category W or a Suspended/Low Mileage Vehicle.
Does My Vehicle Qualify as an Agricultural Vehicle?
To ensure that your vehicle qualifies as an “agricultural” vehicle according to IRS standards, here are the two requirements your vehicle must meet:
- 1. The vehicle is used primarily for farming purposes throughout the tax year. But what does the IRS consider “primarily for farming purposes”? It’s actually quite simple. More than half of the vehicle’s total mileage for the year must be used for farming purposes.
And a farming purpose, according to the IRS, is any activity that contributes to the conduct of a farm. This can include activities such as transporting goods to and from a farm (goods like livestock, produce, animal feed, fertilizer, etc), direct use in agricultural production, or just performing work around the farm like repairing fences, building irrigation ditches, clearing land, etc.
- 2. The vehicle is registered as an agricultural vehicle in your state. Although your vehicle must be registered as such, no special license plates or tags marked “agriculture” are required to maintain your status as an agricultural vehicle.
If your vehicle meets both of these requirements above, then you can file as an agricultural vehicle with a higher mileage limit! Woo hoo!
To file as a suspended agriculture vehicle, skip the first “Taxable Vehicle” section of the 2290, and instead enter your vehicle’s information under the “Low Mileage/Suspended Vehicle” section. And be sure you check the box “Used for Agriculture
Exceeding the Mileage Limit
Occasionally, agriculture vehicles will be filed as Suspended (Category W) at the beginning of the tax period, but then exceed the 7,500 mile limit during the year.
If your vehicle goes over, you must file a Form 2290 Amendment for a Mileage Increase. The amendment is due by the end of the month following the month in which you exceeded the limit. This means that if you went over 7,500 in January, then the amendment must be filed by the last day of February.
When filing the mileage increase amendment, the IRS will prorate your HVUT for the remaining months of the tax year (which runs from July 1st to June 30th each year). This means that even though you will owe some tax, it will not be the full amount you would’ve owed if you had filed as a non-suspended vehicle initially. Hooray, for lower tax!
Year-Round Support for Farmers!
If anyone deserves a break, it’s farmers! That’s why we’re always here to assist you 24/7, 365. At this time of year, we’re getting plenty of calls from farmers trying to renew their tags, but suddenly realizing they need a stamped Schedule 1 to do so! Luckily, they’ve come to the right place!
E-filing with ExpressTruckTax is the fastest and easiest way to receive your stamped Schedule 1. You can even get it after business hours or on the weekend! (If you elect to pay the IRS by check or money order.)
If you have questions about E-filing your Form 2290 with a Suspended Vehicle or questions about E-filing a Form 2290 Amendment for exceeding the mileage limit, call our Support Heroes! They’re available at 704.234.6005 or for 24/7 assistance, email firstname.lastname@example.org.