LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 4 SLS 202ES 50
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: September 28, 2020 8:14 PM Author: CATHEY
Dept./Agy.: Revenue
Subject: Sales Tax Exemption: Farm Equipment Analyst: Benjamin Vincent
TAX EXEMPTIONS OR DECREASE GF RV See Note Page 1 of 1
Exempts purchases of certain farm equipment from the state sales and use tax during a declared state of emergency or
disaster. (gov sig) (Item #26)
Present law exempts that portion of certain purchases of farm equipment that is below $50,000 from state sales and use
tax.
Proposed law fully exempts certain purchases of farm equipment made between November 1, 2020 thru June 30, 2021 from
state sales and use tax. Proposed law applies the exemption to that portion of the sales price that is above $500,000 for
each item of farm equipment.
Effective upon governor’s signature.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $51,000 $0 $0 $0 $0 $51,000
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $51,000 $0 $0 $0 $0 $51,000
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. DECREASE $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0
EXPENDITURE EXPLANATION
LDR anticipates incurring minor costs in the implementation of a new exemption, revision of exemption certificates, and
modification of sales tax returns. This cost is estimated to be approximately $51,000.
REVENUE EXPLANATION
Proposed law enacts a list of several items under the definition of “farm equipment”, and exempts that portion of purchases
which is above $500,000 per item under the definition for purchases between November 1, 2020 and June 30, 2021.
Current law provides sales tax exemptions on that portion of the sales price that is below $50,000 for some items that would
fall under the proposed definition of farm equipment. For each item in this category that has a sales price beyond $500,000,
the portion that is above $500,000 would also be exempt.
Proposed law would also expand the list of exempted items to include replacement parts, hydraulic oil and lubricants, and
labor costs on repairs for agricultural equipment.
Reliable data on the amount of these purchases made, with detail on the specific prices paid per item, is unavailable at this
time. Thus, the magnitude of the revenue impact is unknown. Proposed law would result in an indeterminable revenue
decrease.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Gregory V. Albrecht
x 13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Chief Economist
or a Net Fee Decrease {S}