Do the Amish Pay Taxes?

by on April 11, 2011 · 45 comments

The tax deadline is upon us, and I wanted to take this opportunity to shed some light on a very controversial topic to attempt to answer the question: do Amish pay taxes?

There are several reasons why this topic is so controversial, and two that I would like to address. Taxes are charged by many levels of governments in order to carry out many different functions. Some of these functions include maintaining and building roads, public transportation, public works, enforcement of law, protection of property, welfare, education, etc. Whether or not you agree with these functions is another topic all together. However, several of these government functions benefit everyone—Amish included—even though the Amish may not actually contribute to these benefits financially. The most obvious example is the building and maintaining of roads. The cost of this is paid for mainly through gas taxes, revenue from driver’s licenses, and money collected through tolls. While the Amish do not pay these consumption taxes, they do use roads and bridges to drive their horse and buggies on.

The second reason why this topic is so controversial is because of the lack of information that has led to the assumption that the Amish do not pay any taxes at all. This is simply not true. There are taxes that are not paid by the Amish, but in each of these cases, it is because they either do not consume the service or product involved and so do not pay the excise/consumption tax, or they do not take advantage of the government benefit due to religious reasons, and therefore do not contribute towards its upkeep.

In order to receive any of the tax exemptions I am about to discuss below, an Amish person must formally join the Old Order Amish church. Amish join the church when they feel ready to do so, and in most cases this is in the late teen years. Once joining the church there is a form to be filled out that will make them eligible for certain tax exemptions.

Do Amish Pay Taxes? Here are the Taxes the Amish Pay

The Amish pay income tax just like the rest of us Englishmen (that’s what they call Americans who are not Amish), and they also take any qualifying Child Tax Credits worth up to $1,000 per child. But let’s face it: most Amish families have upwards of 8+ children. How else can they run those large farms and family businesses? I remember one of our neighbors while I was growing up who had twelve children. When I naively implied that her family was huge, she blushed and said that she has had one new child every two years like clockwork since the beginning of her marriage. This definitely cuts down on their tax bill.

Since the Amish own a lot of land, they also pay a lot of property taxes and are liable for estate taxes as well. However, any property taxes paid do not benefit them because they have their own one-room schoolhouses where children are taught by devout, single Amish women until the 8th grade. They also own rather beautiful, typically large homes due to large families (whether or not the Amish pay for Home Insurance is an interesting topic for another article).

Payroll Tax Exemptions

The Amish do not collect unemployment, social security, or welfare benefits because doing so would be against their religious beliefs. As such, they have been exempt from paying into these systems. This is rooted in their religious belief to insure their kind (specifically the following Bible verse has been cited by the Amish to explain this: I Timothy 5:8 says “But if any provide not for his own, and especially for those of his own house, he hath denied the faith and is worse than an infidel.”). They also believe that insurance is an outward sign of a lack of faith in God. Instead of insurance, they collectively help one another pay medical bills, rebuild homes and farms, etc. When someone has a huge bill that they cannot cover, they stand up in their weekly church ceremony and tell everyone about it. No one leaves until enough money has been raised to cover this expense. In a sense this is insurance, but it is among themselves and does not involve an outside body. The Amish even have an exemption in the new Healthcare law—which mandates that everyone carry health insurance—for these same religious reasons.

Social Security is a form of insurance for old age and survivors, so they do not collect it, nor do they pay into it. This exemption was written into the 1965 Medicare Bill after a very interesting series of events you may wish to read about.

Consumption Taxes Not Paid—Gas and the ‘Sin’ Taxes

Your lifestyle dictates the consumption taxes that you pay. The same is true of the Amish, who have a much more restrictive lifestyle than most of us. Horse and buggies—the main mode of transportation for Amish—do not use gasoline. As such, the Amish do not pay gasoline taxes. The federal excise tax on fuel is 18.4 cents per gallon and 24.4 cents per gallon for diesel fuel. State fuel taxes vary, but average 48.1 cents per gallon and diesel fuel taxes average 53.1 cents per gallon (this includes the federal fuel tax). Federal proceeds go into the United States Highway Trust Fund. State proceeds typically go towards roads and other transportation projects. Even though the Amish do not contribute towards these funds, their horseshoe-clad horses have been known to do some damage to the roads. It is interesting to note that certain counties in Indiana and Ohio, where there are a large and growing Amish population, require Amish buggies to get license plates.

A trek through Amish country in Lancaster PA will show the periodic barn with wooden slats opened to the air. These are tobacco barns that have been modified in order to air-cure tobacco leaves. While some Amish make money from selling tobacco, they do not purchase cigarettes because they are viewed as ‘worldly’ (that doesn’t mean they do not smoke cigars/pipes and use chewing tobacco, though smoking is forbidden in many Amish sects). This means that they do not pay taxes on cigarettes, but may pay taxes on other tobacco products. States use tobacco tax revenue in various ways, such as to fund health education programs, early childhood development, breast cancer research, education, etc.

Other ‘sin’ taxes not paid by the Amish are for alcohol or gambling winnings (this is probably not paid by most of us either!). The Amish do not consume alcohol. As such, they do not pay the alcohol tax. Federal alcohol tax is currently 21 cents on a bottle of wine, 33 cents on a six-pack of beer and $2.14 on a fifth of hard liquor. State alcohol taxes rates, which vary, generally go into a state’s general fund. And finding an Amish person in a casino would be like finding my grandmother in couture—it’s not going to happen.

Do Amish pay taxes? I think you can see from above that the answer is yes. They pay some taxes, while others they are exempt from either because of consumption habits, or due to exemptions.

Another Article You May Enjoy:

Amish Finances
Extreme Frugality: 9 Unbelievable Frugal Stories by Everyday People
Getting Rid of Old Appliances for Cash
Scrapping Metal for Extra Cash

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{ 35 comments… read them below or add one }

Diana B

Very interesting article–thank you! I love reading about the Amish because even though they reside alongside us in this country they live so very differently and thrive.

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Vickie G.

I would like to add, that the Amish do use petroleum products, and plenty of it (at least in Lancaster county). Their homes and farms are powered by diesel fuel, which is set up to use air lines for use with Amish milking systems, pressure hoses, and washing machines. Farmers have 1000 gallon tanks because of the amount of diesel needed for their operations. The Amish also use great amounts of propane – this is how they light their houses, and many of them heat their homes with propane. As far as gasoline, one cannot drive through Lancaster county without seeing many leaf blowers being used. The Amish take great pride (and it shows) in the appearance of thier property and are continually mowing, raking and blowing away leaves, brush, or anything that might interrupt the beautiful landscape of Lancaster county!

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Amanda L. Grossman

Hi Vickie!

Thank you for your insight and information. There is a diesel tax, so they are helping with the examples that you gave. I’ve only ever seen extremely well-kept Amish farms and homes as well. It’ll be nice to visit next week!
Amanda L. Grossman recently posted..Frugal Confessions – Frugal Living

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joe tomich

my problem with the whole thing is as a business person they don’t have to pay workmans comp, and the other things that contractors have to pay. but yet I do have to bid against the (amish) I go to church I don’t smoke don’t drink. As a business owner have to pay for my own insurance or medical bills out of pocket. they should be held to the same standards as myself.

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Ralph

The swearing & drinking they really do a lot of that. A miss understanding that they don’t indulge in things. They have cell phones, bank cards , cars or vans are kept in the barn & is owned by them & taken care of by them but they have others outside the Amish to drive them around. Electric is in the barn & property just not in the home. Growing up in Pa. I saw many drunk driving Amish buggies horse & driver get killed. Their just people just like us, only a little different .I also remember Amish waiting for the school bus to bring kids home, that’s when I learned about them selling Marijuana. Never saw them smoke but they did sell it.

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Doable Finance

Amish tax or no Amish tax is not the question. The bigger question is G.E. did not pay taxes (or very little when they revised it because of articles in media) and other conglomerates for the year 2010.

Congress of the United States (more like the Roman Senate – aloof, arrogant, deliberately trying to stay away from the issues facing the common man and woman, in the strong grips of the lobbyists with special interests) must close the loopholes that give big companies every drop in tax dollars. That not only subsidize their losses but let them keep their profits 100%.
Doable Finance recently posted..Tips How To Handle Bankruptcy As A Last Resort

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FruGal

Hello!

I have heard that GE made billions of dollars in profit last year and did not pay any taxes…that is insane. Thanks for your thoughts!

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krantcents

Interesting article! The number of Amish people is incidental compared to all the rich people who do not pay their fair share of taxes.
krantcents recently posted..Financial Skills for Teens

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FruGal

Thank you for reading, and for your perspective!

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BeerDude

“Do not pay their fair share”?
What would be fair? Can you give us a number that they should pay?
If there was a flat tax, and everyone paid that set percentage, only then would the word “fair” be applicable.
If someone is expected to pay a higher percentage than you, where is the fairness in that?
Be gone, troll.

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Jeff

It seems fair that the Amish don’t pay taxes on products they don’t use. However, they are a part of this nation.. so my feelings are mixed.

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Joseph Slabaugh

Hello, I am former Amish, and I have to say, since the Amish pay both for public schools and their own private schools, they are in fact double taxed for that. They should have a way to write off the expenses for their own schools on their property taxes.
Joseph Slabaugh recently posted..How to make paypal buttons

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Sandy @ yesiamcheap

This was a great article. I read it from beginning to end. My only interaction with the Amish was a trip to Amish country in PA. I thought that the land was beautiful and the people interesting in their mode of dress and speech.
Sandy @ yesiamcheap recently posted..Third Earth Day Is My Birthday Green Goods Giveaway

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Amanda L. Grossman

Thank you! I am so glad you are interested in the topic.
Amanda L. Grossman recently posted..Frugal Confessions – Frugal Living

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Rob

Fun fact:
The Amish are heavily involved in building and home improvement businesses. They get around the religious restrictions by partnering with an “Englishman” who drives the truck, pays for the permits, and buys the materials.

We took a few quotes from various Amish companies when we were replacing our roof last summer. They were all on the high side, too.

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optionsdude

It seems fair that if the services are not used, taxes should not be paid. The Amish pay property tax as you said. I think license plates for horse and buggies using the roads is a fair solution as well. If you don’t consume alcohol or tobacco products, you shouldn’t pay the tax anyway so that makes sense.

It seems like the Amish have a good answer to insurance. They are self-insured and have their own co-op. It would be an interesting experiment to try with Englishmen and take out the insurance company middlemen.
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Everyday Tips

I really enjoyed this article. I find the Amish fascinating and often wonder what Amish life would really feel like.

It is very interesting how the Amish handle their finances within their own little system. I especially found how they handle their medical care costs interesting.

Thank you for sharing!
Everyday Tips recently posted..Lessons Learned From Vacation

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retirebyforty

Very interesting!! I didn’t think the buggy would damage the road because they are so much lighter than cars, but I guess I was wrong. We’ve never been to Amish country, but I would love to drop by sometime.
retirebyforty recently posted..Last Days For 2010 529 Contributions

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basil

It’s not just the horseshoes, it is the steel wheels that over time damage the roads. In rural West-Central PA, there are places with grooves from these wheels running down country roads for miles. Doesn’t seem like a big deal until you hydroplane on the wet roads because of the surface damage.

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Homemade dog food

You are absolutely right, Self-employed Amish do not pay Social Security tax. Those employed by non- Amish employers do pay Social Security tax. The Amish do pay real estate, state and federal income taxes, county taxes, sales tax.
Homemade dog food recently posted..Nutmeg Pudding

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Jared Akins

I now have for two months have supposed amish living next door to me.They have a skid steer,4 wheeler,chain saw’s etc. not the amish that I have seen all around this great country.Each to his own but if they hate us like muslims they should buy a ticket on a boat and go back to the home land.Tax evading is all they are!!!

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Thad P

Fascinating article Amanda. I confess I had never wondered if the Amish paid taxes until I saw your title. Very informative.

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FruGal

Thank you Thad! I am glad you found it interesting; even though I grew up with Amish all around me, I still find them fascinating and want to learn more.

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Scoots

I would think they draw enough tourists to even out the taxes they don’t pay like us. Good enough for me!

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Matt

Exempt from Social Security! Sign me up. Where can I apply to be Amish? j/k

Fascinating read Amanda. I’ve actually delivered goods and equipment to Amish farms quite a bit over the year. I’ve talked to some of them about this very subject.

One thing that gets me though… If Pastors and Amish can be exempt from Social Insecurity for religious beliefs, why can’t a regular Christian like myself get the same exemption. My beliefs are exactly the same.

I did not know about the Amish insurance belief. That is incredible!
Matt recently posted..Keeping a Mortgage for Greater Investment Gain

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Matt

Oh.. and I tweeted this out. Thanks for adding that button. Very user friendly now!
Matt recently posted..Keeping a Mortgage for Greater Investment Gain

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Salvador Antonacci

Does really mater if Amish people pay tax, who cares, I think they draw enough tourists for the state or the county where they are,and what we should be looking out is for those Big corporation and rich people, who the government allow them to write off a Hamburger or a cup of coffee on their Income tax.
Salvador Antonacci recently posted..Pros and Cons When it comes to 401k

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keri

I’m sure Amish do not participate in social security benefits and therefore they would not obtain ss numbers for their homeborn children. Which means they can not claim them on their taxes. In order to claim a child, the child needs a ss number.

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keri

BTW, be very careful of a government that is encouraging “class warfare”. The majority of business owners in the us are still 99% middle income people who employ many. I have absoluty no issues with a biz man/family recieving tax benefits, as I look around my community I see an overwhelming amount of generosity from biz people. I would be very cautious of a government who has passed laws penalizing charitable giving.

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Immigration Solicitors in Romford

Hi, I think your blog might be having browser compatibility issues.

When I look at your blog site in Chrome, it looks fine but when opening in Internet Explorer, it has some overlapping.

I just wanted to give you a quick heads up! Other then that, very good blog!
Immigration Solicitors in Romford recently posted..Immigration Solicitors in Romford

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FruGal

Thank you so much for the heads up! I think the photo that I used in my last post has something to do with it…I will alert my tech.

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tina

I am an escrow officer and I have closed a number of transactions with the Amish in Montana. Every closing, it is a battle to get them to disclose their tax id number or give you identification. They do this because they do not want you to report capital gains to the IRS. Because so many of them have the same names, the lack of a picture ID is a huge problem. Over the last ten years I have heard many different Amish people give me lectures about why they don’t have ID (photos steal the soul) or tax id numbers (they are not a number or part of the system) They also sell their crops and request cash so they don’t have to deal with banks or report their income. Not all of them. I have closed a number of Amish people with tax id numbers and photo id’s, but the majority that I have worked with have avoided giving me the information until I told them I would not close without it.

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Debbie

I pay $500 every 2weeks to social security. I would like to have the option of saving or investing that myself especially since a large majority of Seniors are barely getting by on their SS checks! I do not and have not collected unemployment or any other government assistance but still have to pay taxes regardless.

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Troy

If I payed taxes for what I used or my family used that would be the perfect world. Example I don’t plan on having kids but I pay taxes for others to send their kids to school. Do the Amish enjoy the freedom that our military provides? Do they pay for that? Road usage per gas tax absurd…. They can take their horse and buggy and make their own roads on the unpaved shoulder.
As for the Amish do not drink….. Take a trip out yo Lancaster you will see plenty of Amish bellied up to a bar, however that should not exempt them from an alcohol tax. If they own a business they should have to pay workmans comp just like the rest of the working stiffs who own a business. Oh and when can I opt out as an American to not pay into SS, welfare and other usage taxes. Last time I checked as an American we pay for all regardless if we use it or not. No exemptions no accept ions. Addressing the land tax yes they pay it but it’s not at the same rate as property tax the rest of Property owners pay, they get a substantial discount for calling it a farm. I can go on all night about separating church and state but hey who cares about my rant.

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Paul Wyrick

Only one thing in this article I disagree with and that is they do not drink.I was surrounded by them in Ohio and on Saturday would be asked by them to buy liquor.Many times I would have 3 cases of liquor to deliver to them after my trip to town.Almost all have cell phones except the very strict sects.

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