New Sales & Use Tax Exemption for Forestry Equipment & Machinery

The VT Department of Taxes announced that beginning July 1, 2017, specific types of machinery, equipment, and repair parts traditionally used in forestry are now exempt from sales tax at the time of purchase. (Secs. 17-18 of Act 75 and Secs. 9-10 of Act 77.)
 
This exemption for machinery and equipment is a product-based exemption. That means the purchase of those specific types of machinery and equipment does not require an exemption certificate at the time of purchase. Retailers might find it useful to have an exemption certificate filled out for their records, so a spot for that is included on the S-3W form.
 
The following items are specifically listed in statute and are exempt from sales & use tax beginning July 1, 2017:
 
  • Skidders with grapple & cable
  • Feller bunchers
  • Cut-to-length processors
  • Forwarders
  • Delimbers
  • Loader slashers
  • Log loaders
  • Whole-tree chippers
  • Stationary screening systems
  • Firewood processors, elevators, & screens
Additionally, repair parts used in these pieces of machinery and equipment are exempt from sales tax as well. Since many of the parts can be used on both taxable and exempt purchases, sellers will need to require a completed S-3W "VT Sales Tax Exemption Certificate for Forestry & Wood Products Machinery, Equipment, and Repair Parts". This is a new form for administering this exemption.
 
The Department of Taxes has created a webpage with FAQs for help in implementing this new exemption which will be updated as additional questions arise. Additionally, here is a link to the fact sheet and the S-3W form.