[2-15 | Keywords: Iowa Legislation, Sales Tax, ATV]
Iowa Code 321I.9 exempts ATVs and OUVs (Off-road Utility Vehicles) used exclusively for agricultural purposes from titling and registration requirements. However, registration may be required by insurance companies and prove useful at a future date when the owner wishes to sell, by assisting with the verification of ownership and clarifying that there is not a lien holder on the equipment.
If the machine is being financed and a lien must be filed, then title and registration must be obtained.
We would encourage you and your customers to consider registration of an ATV, especially is the owner ever plans on trading the ATV in, needs insurance, operates it on a public road or ATV park, or if you cannot verify that it is being purchased by exempt user.
ATV Sales Tax Change
In 2015, the Iowa Legislature also passed legislation that will make it easier for Iowa equipment dealers to sell All-Terrain Vehicles (ATVs) to farmers regarding the sales tax exemption. Prior to this legislation, farmers and ranchers were required to pay sales tax on the purchase of ATVs if they were not “primarily and directly used in agricultural production.” As part of this standard, the Iowa Department of Revenue required that anyone who claimed the exemption from sales tax must use the ATV 51% or more for an exempt purpose.
The Association, along with the Iowa Department of Revenue, worked to change the law so farmers and ranchers would no longer have to qualify their use as “primarily” used in ag production. Farmers qualify for the sales tax exemption so long as the ATV is used directly for an exempt activity such as care for animals. The change should also allow dealers to sell exempt equipment to qualified users with less fear of sale tax audits.