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Letter Ruling

Letter Ruling Letter Ruling 81-63: Credit for Taxes on Fuel Used by Farm Vehicles

Date: 07/15/1981
Organization: Massachusetts Department of Revenue
Referenced Sources: Massachusetts General Laws

Sales and Use Tax


July 15, 1981

This is in response to your recent letter in which you requested an interpretation of Section 13 of Chapter 577 of the Acts of 1980, concerning a credit to farmers for certain excise taxes paid on gasoline and special fuels ("fuel").

Section 13 states that "[a]ny person who purchases fuel or special fuel for a farm vehicle as used for farm purposes on or off public ways shall be reimbursed for any tax cost resulting from a tax imposed by this act as provided in section seven of chapter sixty-four A of the General Laws exempt from the provisions of this act."

Fuel is used for "farm purposes", whether used on or off public ways, if it is used by the owner, tenant or operator of a farm in connection with cultivating the soil, raising or harvesting any agricultural or horticultural commodity, or raising, shearing, feeding, caring for, training, or managing livestock, bees, poultry, or fur-bearing animals or wildlife; in handling, drying, packing, grading or storing any agricultural or horticultural commodity in its unmanufactured state but only if such owner, tenant, or operator produced more than one-half of the commodity which he so treated during the period for which the claim is filed; in connection with planting, cultivating, caring for or cutting of trees or preparation (other than milling) of trees for market, incidental to farming; or in connection with the operation, management, conservation, improvement or maintenance of such farm or its tools or equipment.

Fuel consumed by a farm vehicle in traveling from one part of a farm to another is eligible for the credit even though public roads are used in making the trip. However a farm vehicle is not used for farm purposes, within the meaning of Section 13, when it is used on a public way for other than traveling between sections of the farm. Thus the fuel a farmer uses in a truck to bring supplies to his farm from town or to transport produce to a farmer's market does not qualify for the credit.

To claim the credit the taxpayer must keep sufficient records to enable the Commissioner to verify the accuracy of any credit or refund claimed. If a farm vehicle is used for both farm and non-farm purposes, the credit may be prorated so long as the taxpayer's records clearly indicate the number of gallons of fuel used for farm purposes.

Very truly yours,

/s/L. Joyce Hampers

L. Joyce Hampers
Commissioner of Revenue



LR 81-63

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