The Rural Lobbyist: SDFU only group to support the repeal/redirection of farm machinery tax increase

 Over the past two years we have witnessed two of the largest tax increases in our states history. The first in 2015 looked to improve our eroding infrastructure. The second gave our teachers a much needed pay raise. The problem? While both issues were certainly worthy causes, the fee and tax increases came largely off the backs of farmers and ranchers in South Dakota. Many SDFU members bristled at the idea of increasing the farm machinery excise tax from 4 to 4.5% in last year’s teacher pay funding bill. With down markets and the grim realities in projected forecasts, it was certainly a tough pill to swallow. Yet, we did not want to stand in the way of teachers getting their necessary pay increase. We were stuck between a rock and a hard place. With the announcement of Amazon collecting sales tax, a number of Senators and Representatives sought to recoup that .5% increase by lowering the tax back to 4% through Senate Bill 105. Senators Stace Nelson, Jason Frerichs, and Lance Russell were major supporters of the bill, while Representative Drew Dennert was a strong advocate in the House. SDFU took a multi-pronged approach in support of Senate Bill 105. In my testimony I suggested that an amount equivalent to that .5% increase should be applied to funding the Animal Disease Research and Diagnostic Lab. Doing so would eliminate the need to raise further taxes and fees in order to make a bond payment. However, I made it clear that if that approach could/would not be agreeable, SDFU fully supports the repeal of that .5% through the passage of SB 105. SDFU member and former state legislator Paul Dennert also spoke in favor of the bill and SDFU proposal of applying the .5% to the ADRDL in Brookings. It is interesting to note that SDFU was the only ag organization to take a stance in support of SB 105. SD Coop Association, SD Soybean Association, and SD Pork Producers all testified in opposition of SB 105 and in favor of keeping the .5% increase on farm machinery. Other ag groups were silent on this particular piece of legislation. Ultimately the bill was deferred until the 41^st day by a vote of 5-2. However, SDFU’s proposal to direct the .5% to the ADRDL was included in Senate Bill 162 which was heard in Joint Appropriations on Thursday. That committee has yet to take action on the bill.

Last Modified: 02/10/2017 3:21:48 pm MST