AL SB165

Exempts agricultural machinery and equipment from Alabama state sales and use tax, replacing the current 1.5 percent tax rate.

Phases in the exemption over three years: Year 1 taxed at 1 percent, Year 2 taxed at 0.5 percent, Year 3 fully exempt.

Applies to machinery, equipment, parts, attachments, and replacements used for planting, cultivating, harvesting farm products, or agricultural production including livestock and poultry.

Exemption does not apply to automotive vehicles or trailers designed for public highway use, except farm trailers used in agricultural production.

Exemption does not apply to local sales and use taxes unless previously exempted by local law or approved by local resolution; becomes effective October 1, 2017.