ND HB1236

Defines "lease" as agreements longer than 11 months and "rental" as agreements of 11 months or less for possession and use of property, with lease potentially including ownership transfer.

Allows trade-in of farmer-owned or farmer-leased equipment to reduce taxable purchase price when a retailer sells farm machinery to a lessor and purchases the farmer's equipment, with documentation required.

Imposes a 3% tax on farm machinery and irrigation equipment sales, leases, and rentals, with exemptions for used farm machinery and equipment previously taxed.

Requires lessors to pay taxes on new farm machinery leases: full tax upfront on purchases, or for leases of 3+ years, either full tax based on three years of cumulative payments or tax collected with each payment.

Effective for taxable events after June 30, 2013, with House vote of 86-5 and Senate vote of 47-0.