When it comes to paying taxes, the Amish community adheres to many of the same responsibilities as any other American citizen, including land taxes. This blog post delves into the various tax obligations of the Amish and dispels some common misconceptions.
Income and Property Taxes for the Amish
The Amish, like other U.S. citizens, are responsible for federal and state income taxes. Many Amish are self-employed or run businesses, which means they contribute significantly through income taxes.
As property owners, the Amish also pay property taxes on their farms, just like regular homeowners.
These taxes can be quite significant for larger pieces of land, particularly in states like Pennsylvania, where property taxes are high.
Just like how you get a property tax bill from the local school district, township, or county, the Amish get one too. When they receive their bill, they simply write a check to the taxing agency to settle the payment.
In Pennsylvania, many Amish farms are enrolled in a program called Clean & Green. This program gives them a preferential tax assessment in return for agreeing not to develop their land or to limit development.
So, by keeping their land as farmland and not building on it, they get a lower tax assessment value and lower property taxes.
The Amish also pay school taxes, even if they choose to send their children to community-run Amish schools.
Pennsylvania’s Clean and Green Program Explained
The Clean and Green program in Pennsylvania is a preferential tax assessment initiative that benefits landowners, including the Amish community. Let’s break down how this program works in simple terms.
Introduced in 1974, the Clean and Green program is designed to encourage the preservation of farmland, forestland, and open spaces in Pennsylvania. It achieves this by assessing property taxes based on the land’s agricultural, rather than market, value. This often leads to significant tax savings for landowners.
To qualify for the program, properties must be at least ten acres in size and used for agricultural purposes, agricultural reserves, or forest reserves. Properties under ten acres can also qualify if they generate a minimum of $2,000 annually in farm income.
For the Amish, who predominantly engage in agricultural activities, this program is particularly beneficial.
It helps reduce their property tax burden, making it easier to maintain their farming lifestyle. This support is crucial for Amish farmers, especially those in areas with high property taxes.
Leaving the Program and Penalties
If a landowner decides to remove their land from the program, they face rollback taxes. This penalty covers seven years of taxes at 6% interest per year, calculated as the difference between what was paid under Clean and Green and what would have been paid without the program.
The penalties for leaving Pennsylvania’s Clean and Green program are designed to encourage landowners to keep their land in agricultural or conservation use.
For more information, see:
- Pennsylvania’s Clean and Green Program, The Pennsylvania State University.
- Clean & Green Farmland Preservation Program, Official Pennsylvania Government Website.
Sales Tax
When it comes to sales tax, the Amish are required to pay it in states where it is applicable. This includes taxes on purchases made for their businesses and personal use.
The general assumption that the Amish community evades sales taxes is a myth.
Social Security and Health Programs
One notable exemption for the Amish is from Social Security and related health programs. The Amish community, known for its self-reliance, opts out of government benefits.
They take seriously the belief that each individual should provide for their family and community.
Instead of relying on government aid, the Amish support each other through mutual aid within their community.