LANSING, Mich. — The state Senate on Thursday approved a package of bills that eliminates confusion surrounding sales tax exemptions for equipment used specifically for agricultural purposes.
House Bills 4561-4564 stem from an incident in the Thumb that not only denied a farmer a deserved exemption, but ended up costing him thousands of dollars in fees contesting the Michigan Department of Treasury’s interpretation of the law.
“What this bill does is bring clarity to a common sense idea,” said Sen. Ken Horn, R-Frankenmuth, who joined a bipartisan group of lawmakers in supporting the bills. “Agriculture is one of the state’s largest industries and is one we certainly need to protect. We’ve all seen the ‘no farmers, no food’ bumper stickers, but I think few people realize how true that really is.”
The bills would rephrase current sales tax exemptions in an effort to clarify when they can be claimed. Equipment or technology that is purchased to grow, harvest and sell agricultural goods would be exempt under the legislation. Structures and structural components related to the production and sale of agricultural goods would also be exempt.
“It shouldn’t be up to auditors within the department to decide that paint — but not the paintbrush — used to paint a barn is exempt from sales tax,” Horn said. “The department’s interpretation imposed a great financial burden on Michigan’s farmers. These bills were easy to support and I’m happy to have stood behind our agricultural industry.”
The bills will now return to the House for a concurrence vote to the Senate changes.