Changes to Primary Producer Registration (NSW) from 1 July 2026
Changes to the legislation came into effect on 1 July 2026. The change was to provide that a person must carry on a primary production business, within the meaning of the Income Tax Assessment Act 1997 of the Commonwealth, to be eligible to receive certain concessions on vehicle registration for primary producers.
The change removes the historical emphasis on whether a person derived the majority of their income from farming. Under the Income Tax Assessment Act 1997 (Cth), a taxpayer may carry on a primary production business while also deriving income from employment or other business activities. The focus is now on whether the entity is genuinely carrying on a business of primary production, not whether farming is it's sole or predominant source of income.
The permitted uses of the concession have remained largely unchanged. However, the eligibility criteria have changed significantly by adopting the Commonwealth concept of a 'primary production business'. This is likely to make the concession more accessible for modern farming structures, including companies, trusts and related entities, as eligibility now turns on whether the registered owner is carrying on a primary production business rather than a standalone NSW definition.
Eligibility:
Be a "primary producer" within clause 127B.
Be carrying on a "primary production business" within the meaning of the ITAA 1997.
The vehicle must be used solely (heavy vehicles) or solely or principally (light vehicles) for the prescribed relevant purposes.
The vehicle must not be used for a prohibited purpose.
The impacts
Some people may lose eligibility
The amendment is likely to make it more difficult for hobby farmers or those with limited farming activities to qualify where those activities do not amount to carrying on a primary production business.
Some corporate structures may find it easier
The previous NSW definition focused on the person cultivating or using land. The new definition focuses on whether the entity carries on a primary production business.
Greater reliance on taxation law
Eligibility will now be determined by reference to established taxation principles and ATO guidance on what constitutes carrying on a business. This provides greater certainty for operators but also means that those claiming the concession should be able to demonstrate genuine commercial farming activities.
Key definitions
A primary producer means a person who, in the course of carrying on a primary production business:
cultivates or uses the person’s own land or land of another for the person’s own benefit—
gathers leaves from which eucalyptus or other oil is to be distilled.
A primary production business means the carrying on a business of:
cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things), in any physical environment; or
maintaining animals for the purpose of selling them or their bodily produce (including natural increase); or
manufacturing dairy produce from raw material that you produced; or
conducting operations relating directly to taking or catching fish, turtles, dugong, bêche-de-mer, crustaceans or aquatic molluscs; or
conducting operations relating directly to taking or culturing pearls or pearl shell; or
planting or tending trees in a plantation or forest that are intended to be felled; or
felling trees in a plantation or forest; or
transporting trees, or parts of trees, that you felled in a plantation or forest to the place:
The ATO provides the following guidance:
A person is carrying on a business of primary production for the purposes of the ITAA 1997 if: he/she produces 'primary production', as defined in subsection 995-1(1) of the ITAA 1997; and that activity amounts to the carrying on of a business.
A taxpayer does not need to derive all his/her income from the primary production activity. The taxpayer may also be employed in some other occupation or profession. What is important is that the taxpayer's primary production activity amounts to the carrying on of a business. This activity is considered separately from any other employment or business carried on by the taxpayer. The facts of each case must be examined. In Martin at CLR 474; AITR 551 Webb J said:
"The test is both subjective and objective: it is made by regarding the nature and extent of the activities under review, as well as the purpose of the individual engaging in them, and, as counsel for the taxpayer put it, the determination is eventually based on the large or general impression gained."
A relevant purpose means
carting primary products the owner or another primary producer has produced, or
carting leaves the owner or another primary producer has gathered and from which eucalyptus or other oil is to be distilled, or
carting goods for use in the primary production business of the owner or of another primary producer, or
purposes connected with clearing land the owner or another primary producer proposes to use for primary production.
A prohibited purpose means
hiring the vehicle out, whether under a formal lease or otherwise, or
using the vehicle for the benefit of another person for a fee or other consideration
Authored by Belinda Hughes of Hughes Law
click to connect
