California Sales Tax Exemptions for Farming - Partially Exempt Vehicles
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8/12/20261 min read
Many vehicle purchases that qualify for the partial exemption (for example, farm equipment driven on highways, such as a cotton trailer or trap wagon, for less than two miles laden or 30 miles unladen) must have and display a special equipment (SE) identification plate from DMV.
Off-highway vehicles require an off-highway vehicle (OHV) identification plate.
When a dealer sells a vehicle that qualifies for the partial exemption, the dealer may apply for the SE or OHV plate and pay the appropriate sales or use tax to CDTFA.
To collect the reduced rate, the dealer must also obtain a partial exemption certificate from the buyer.
However, when a person buys a vehicle from an out-of-state retailer or someone who is not a licensed vehicle dealer in California and uses the vehicle in California, the buyer must report the purchase and pay the use tax.
A “qualified purchaser” may claim the partial exemption by either:
- Paying the full amount of tax to DMV when applying for an SE or OHV plate and filing a claim for refund with CDTFA for the tax-exempt amount, or,
- Paying the tax, less the tax-exempt amount, at one of the CDTFA offices and requesting a tax clearance. The tax clearance allows the qualified buyer to obtain an SE or OHV plate for the vehicle from DMV without paying additional tax.
Source: California Department of Tax & Fee Administration (CDTFA)