Alabama Considers Removing State Sales Tax On Farm Equipment

An Alabama state legislator wants to remove farm equipment deals from the state’s sales tax. State Rep. Paul Lee of Dothan says he will sponsor a bill to exempt agricultural equipment from the state’s sales tax, which is 1.5% for such transactions.

Lee says the move would help Alabama companies compete with sellers in neighboring states since Florida, Georgia and Tennessee already exempt such transactions from their sales tax. Taxes on farm equipment sales can run into the thousands of dollars because of the high price of machinery like large tractors.

The Dothan Eagle reported that the cost of such a law isn’t yet known because the Legislative Fiscal Office hasn’t analyzed the bill. But Lee says any lost revenue would be made up by business being retained in Alabama.