Sales tax exemption for twine used in agriculture proposed

Twine used to bale hay would be exempt from state sales and use tax under a proposal heard Jan. 27 by the Revenue Committee.

Under LB96, introduced by Sen. Julie Slama of Dunbar, state sales and use tax could not be imposed on the gross receipts from the sale, lease or rental of twine purchased for use in commercial agriculture.

Slama said the bill is a follow-up to LB941, passed last session, which exempted net wrap used to bale hay from state sales and use tax. She said a pending amendment also would exempt baling wire.

The changes would ensure that Nebraska farmers do not face unexpected sales tax charges when buying their baling materials, Slama said.

The state Department of Revenue estimates that LB96 would reduce state general fund revenue by approximately $37,000 in fiscal year 2023-24 and $61,000 in FY2024-25.

Phil Erdman testified in support of the bill on behalf of the Iowa-Nebraska Equipment Dealers Association. He said it would clarify to dealers that they should not collect state sales tax on either net wrap or twine.

No one testified in opposition to LB96 and the committee took no immediate action on it.