State Legislative Update

Almost every state is looking to change its dealer franchise laws as more franchised automotive dealers find themselves between a rock and a very hard place. Arkansas HB 2165 and HB 2166 sponsored by Rep Larry Cowling would exempt parts and labor for agricultural equipment from local sales and use tax. This bill has been referred to the House Committee on Revenue and Taxation. Further along the legislative path is SB 73 which would exempt the proceeds derived from the sale of new and used farm equipment from the gross receipts tax. This bill has passed the Senate and been sent to the same committee in the House as the first mentioned bill.

Minnesota is also looking to provide some tax relief with SB 1356 which would expand the definition of farm machinery from the current list of exempt products. Grain bins and related equipment seems to be the main focus, but it adds “…machinery for the maintenance of land in state or federal agricultural programs.” This would cover purchases made after June 30, 2009. The bill has been referred to the Senate Committee on Taxes.

Illinois HB 23 and HB 216 have both been re-referred to the Rules Committee and would exempt farm equipment from personal property tax. While the bill has many cosponsors, the former governor created one of the state’s largest budget shortfalls, making any revenue cuts hard to pass.

Mississippi SB 2606 would revise the state sales tax rate on certain farm equipment, including parts and labor to become 1.5%. This bill has passed the state Senate and has been amended by the House and returned to the Senate for concurrence.

Montana HB 487 would provide an exemption from property tax for farm implements and construction equipment that is rented under a purchase incentive rental program, by considering such equipment business inventory. This bill is still in the House awaiting a revised fiscal note.

Oklahoma legislation is very much a moving target. Those interested in Oklahoma or for more information on those listed above, contact Vernon Schmidt at vernon@FarmEquip.org or (314) 878-2304.