SB69 Alabama 2014 Session

Summary

Primary Sponsor

Tom Whatley

Republican

Session

Regular Session 2014

Title

Agricultural equipment and machinery, sales and use tax exempt, Sec. 40-23-38, 40-23-64 repealed; Sec. 40-23-37, 40-23-63 am'd.

Summary

SB69 would remove the state sales and use tax on agricultural machinery and equipment and replace it with a 1.5% license tax on sales and a 1.5% excise tax on storage, use, or consumption, effective October 1, 2014.

What This Bill Does

The bill changes how taxes are collected on farm machinery and related parts. It repeals the existing administration of the sales/use tax on ag equipment and instead imposes a 1.5% license tax on the gross proceeds of retail sales of farm machinery and components (with an exception that the 1.5% rate for parts does not apply to most motor vehicles or highway trailers). It also imposes a 1.5% excise tax on storage, use, or other consumption of such equipment purchased at retail. There are rules about how trade-ins are taxed (net difference), and local sales taxes may still apply if allowed by local law.

Who It Affects

• Retailers and sellers of agricultural machinery, machinery parts, attachments, and replacements in Alabama (they would collect/remit a 1.5% license tax on gross proceeds).
• Farmers, ranchers, and other purchasers of agricultural machinery and equipment (they would see the tax structure shift from a state sales tax to the new license tax and 1.5% storage/use excise tax, with local tax implications).

Key Provisions

• Repeals Sections 40-23-38 and 40-23-64, which dealt with the administration of the sales and use tax on agricultural machinery and equipment.
• Amends Sections 40-23-37 and 40-23-63 to replace the state sales/use tax with a 1.5% license tax on retail sales of farming machinery, equipment, and related parts (including a caveat that the 1.5% rate for parts/extras does not apply to most vehicles or highway trailers, except farm trailers).
• Includes a net difference rule for trade-ins: tax is paid on the price difference when used equipment is traded in on a purchase of new or used equipment.
• Creates a 1.5% excise tax on storage, use, or consumption of the machinery and equipment purchased retail, in lieu of the previous excise tax structure, with similar provisions and local tax caveats.
• States that the exemption from state taxes does not automatically apply to local use taxes unless the local authority approves or it is exempted by local law.
• Effective date: October 1, 2014.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Agriculture