HB86 Summary

• Exempts agricultural machinery and equipment from state sales and use tax, eliminating the existing 1.5 percent tax on these items when used for farming purposes.

• Applies exemption to machines and equipment used in planting, cultivating, harvesting farm products, and livestock or poultry production, including parts, attachments, and replacements necessary for operation.

• Excludes automotive vehicles and trailers designed for public highway use from the exemption, except for farm trailers used primarily in agricultural production and harvesting.

• Repeals sections 40-23-38 and 40-23-64 of the Code of Alabama 1975 relating to administration of the previous 1.5 percent tax rate on agricultural machinery.

• Takes effect October 1, 2014, with exemption not applying to local sales or use taxes unless previously exempted by local law or approved by local governing body resolution.