Ag machinery tax exemption advances

Senators gave first-round approval Jan. 24 to a bill that would exempt certain agricultural machinery purchases from state sales tax.

Under LB96, introduced by Fullerton Sen. Annette Dubas, the sale of repairs and replacement parts for agricultural machinery or equipment would be exempt from state sales tax. Any qualifying purchases made prior to Oct. 1, 2013, still would be eligible for refund.

Dubas said Nebraska is one of only eight states that still charges sales tax on these purchases.

“Agriculture is highly competitive and the profit margins are slim, even when prices are good,” she said. “[The sales tax] puts Nebraska’s dealers at a distinct disadvantage.”

Kearney Sen. Galen Hadley supported the bill, saying it is necessary for Nebraska implement dealers to compete.

“Right now people are leaving the state to get their products,” he said. “We have to increase access to the local dealers.”

Hyannis Sen. Al Davis also supported LB96, saying cities near the border have been especially affected.

“Rural Nebraska already has a declining population problem,” Davis said. “The last thing we need is to have tax policy closing local businesses.”

Senators advanced the bill to select file on a 44-0 vote.

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