SB165 Alabama 2017 Session

Summary

Primary Sponsor

Tom Whatley

Republican

Session

Regular Session 2017

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Agricultural equipment and machinery, sales and use tax exempt, Sec. 40-23-38, 40-23-64 repealed; Sec. 40-23-37, 40-23-63 am'd.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

SB165 would phase out the state sales and use tax on agricultural machinery and equipment over three years, ultimately exempting them from tax.

What This Bill Does

The bill would exempt the sale, use, storage, and consumption of farm machinery and equipment from state sales and use tax, including parts and replacements necessary for farming operations. The exemption would be phased in over three years: 1% tax in year 1, 0.5% in year 2, and full exemption in year 3. It would repeal some existing administration provisions and modify related tax sections, with an effective date of October 1, 2017; local taxes could still apply where allowed by local law.

Who It Affects

• Farmers and ranchers who purchase or use agricultural machinery and equipment would pay less state tax on those items as the exemption takes effect.
• Agricultural equipment retailers and suppliers would collect less state tax on sales of farm machinery and parts and eventually would stop collecting state tax as the exemption becomes complete.

Key Provisions

• Exempts the sale, use, storage, and consumption of agricultural machinery and equipment used on farms from state sales and use tax, including parts, attachments, and replacements necessary for operation.
• Implements a three-year phasing schedule: 1% tax in the first year, 0.5% in the second year, and full exemption in the third year.
• Applies to agriculture as defined in the law and keeps local taxes in place only if permitted by local law or resolution.
• Repeals Sections 40-23-38 and 40-23-64 and amends Sections 40-23-37 and 40-23-63 to implement the phased exemption; the act takes effect October 1, 2017.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Agriculture