High tunnels (also called hoop houses or poly houses) have been considered temporary structures not subject to real estate taxes by most counties in Pennsylvania. Recently Blair and Erie counties have assessed high tunnels as permanent structures subject to real estate taxes.
Real Estate Taxes
PLNA has alerted other agriculture groups, the Department of Agriculture and the General Assembly about this emerging trend and Senators Elder Vogel and Dominic Pileggi are introducing legislation to clarify that high tunnels are indeed temporary structures not subject to real estate taxes.
Uniform Construction CodeA second problem identified by PLNA is that local governments are beginning to treat high tunnels as permanent structures subject to the Uniform Construction Code. There was a recent ACRE case in Shrewsbury Township where a nursery had high tunnels for plant propagation and finishing. The township was requiring fire suppression sprinklers and other UCC requirements in the high tunnels and attempted to shut the nursery down.
The nursery and PLNA were successful with an ACRE claim with the Attorney General and the township backed off. But it took years of effort. The draft legislation is being expanded to clarified in law that high tunnels are not subject to the UCC.
The third problem is the sales tax treatment of components used to build high tunnels. Fairview Evergreen Nursery had this problem with the PA Department of Revenue. The Department of Revenue ruled initially that sales tax was owed on the components of the Fairview high tunnels but Fairview appealed the decision administratively and the Department of Revenue reversed their initial ruling and sales tax was not owed. The legislation is also being expanded to clarify this ruling in law so it cannot be reversed administratively by another administration.
High Tunnels and the Sales and Use Tax
Source: Pennsylvania Landscape & Nursery Association: