Do Wisconsin Farmers Have to Pay Fuel Tax?

Wisconsin Farmers Can Get Fuel Tax Refund

Posted: 4/20/2021

A Wisconsin farmer can get a refund on fuel tax paid. Farmers need to go through their tax professional or accountant to get a refund, according to Troy Thompson, ProVision Partners Energy Division Manager.

"Farmers can also fill out a form with their supplier to obtain the tax exemption on the front end," said Thompson. "This form needs to be completed every two years. When purchasing off-road diesel, farmers with a form on file would not be charged sales tax on fuel. At time of purchase for gasoline however, farmers would only be exempt from state excise tax, as the federal government does not offer an exemption on gasoline."

Farmers also need to keep in mind that there is a minimum gallon delivery required (of 100 gallons) to received the state exemption. ProVision has a 150-gallon minimum for delivery, so this is usually not an impediment.

Thompson also added that farmers should be mindful how they are using the tax-exempt fuel.

"The reason it's tax exempt for farm use is it has to be used for farm use," said Thompson, giving the example of a gas tractor or UTV. "You can't put farm-intended fuel in your car and drive down the road with it. I don't want to scare people away, but you have to be careful. You have to be able to prove it was used appropriately."

Historically, there have been instances in which farmers have been audited and could not demonstrate that the fuel had been used specifically for farm use. In this case, the farmers had to pay back taxes and fines.

"Some farmers choose to have their gas sent fully taxed and they then determine which percentage they are safe applying for as a tax deduction," said Thompson. "The government has become stricter with showing proof of exemption. Farmers should consult their tax professional or accountant for guidance on their situation."

Thompson added that commercial businesses that are not farms or involved in manufacturing generally are required to pay sales tax.

"But, if your tax accountant tells you that you qualify for tax exempt, you just need to fill out a form and get it on file with your supplier," he said. "If I have a form here at ProVision that says your tax exempt, the taxes will not be charged at time of delivery."

"The key is to work with your tax professional," he added. "Your supplier doesn't know your whole business. They will help you decide what's the best way for you to manage the impact of fuel tax, whether that's to take the tax off up front or after you use it."

To learn more about ProVision fuel, talk to one of their Certified Energy Specialists or contact Troy Thompson at 715-387-1291.

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Do Wisconsin Farmers Have to Pay Fuel Tax?