New Changes Coming to Farm Equipment Dealerships
September 3, 2013
Coming to a farm equipment dealership near you … new taxes on service and repairs, and weight, width, height and length limits for implements of husbandry (better known as farm equipment).
We all have a tendency to ignore things that are happening elsewhere because they aren’t happening right in our back yard. Well, maybe dealers should start paying more attention because what’s happening elsewhere — like in other states — could easily end up in their own back yard.
At least three events in three different states during the past several months have the potential to severely impact how farm equipment dealers do business, some good and some not so good.
From the good side comes a story from New Hampshire. This past spring New Hampshire legislators passed the Auto Dealers Bill of Rights, which is scheduled to take effect September 23. Farm equipment and other heavy equipment dealers are also covered under the legislation. Among other things, the new law would prevent manufacturers from forcing dealers to update showrooms, change signs and locations at the manufacturers’ whim. The bill also ends mandates by manufacturers to use out-of-state products and contractors to do showroom upgrades and also ensures proper reimbursement for warranty work done by local dealers.
From the not so good side of this story, last week, John Deere, AGCO and CNH filed a 170-page suit arguing that the law is unconstitutional. Clearly, the big farm equipment manufacturers understand that if they let the law slide in New Hampshire, it could also be adopted by other states and seriously erode their control over their dealers.
Another from the not so good side of the news, another issue causing problems for Minnesota dealers is a new 6.875% state tax on farm equipment repairs, which took effect on July 1. In published reports, Minnesota Governor Mark Dayton said he wasn’t aware until it was too late that the new tax also included farm equipment. Now he’s saying he’s willing to consider rescinding it after dealers and others complained.
An Associated Press article quotes Larry Welle, chief financial officer at Arnold's, a farm equipment dealer with several locations in Minnesota, as saying collecting the new tax has been a major headache. Tax officials have struggled to explain it, adding confusion to an already difficult process, he said.
"We've already spent quite a bit of money — a lot of headaches and a lot of time — putting things in place to collect the tax," Welle said. "After we've spent all the time and energy to do this, they're going to repeal this? Why didn't they figure it out first?"
Let something like this ride without a fight and see how many other states jump on the bandwagon.
Now, the state of Wisconsin is looking at banning some farm equipment from traveling on its roads. Actually, it started out as “some” implements but has somehow grown to include a whole range of farm machinery.
According to the “Implements of Husbandry Study, Phase I Report,” issued on January 31, 2013, “Innovations such as steerable axles, flotation tires, new tire designs and tracks have been implemented in recent years. These and other innovations are geared toward improved field operation, yet often are accompanied by increases in the height, length, width and weight of the agricultural equipment are creating concerns about public safety and infrastructure impacts.”
There’s no arguing that farm machinery — or as the Wisconsin DOT calls it “Implements of Husbandry” — has gotten bigger and heavier. And there’s little doubt that bigger, heavier equipment adds stress to road pavement and bridges.
But if you were to look at the IoH Engineering Matrix draft recommendations of the task force compiled by the IoH task force, you might wonder if Wisconsin farmers will be able to move much of any equipment down the road without written authorization, being fined or requiring “shadow” vehicles.
Apparently, this whole thing is of enough concern that Ballweg Implement of Waupun, Wis., went to the trouble of organizing a busload of farmers to participate in an August 19 meeting on the proposed regulations.
According to the a report in the Wisconsin State Farmer, one recommendation that really got the attention of the farmers and implement dealers attending the meeting was the requirement to get written authorization to exceed size and weight limits on an annual basis. “Arrangement can be made between local authorities and farmers to make sure it’s safe and damage won’t be excessive on local roadways. We want to have collaboration between local authorities and farmers,” said Rory Rhinesmith, Wisconsin Dept. of Transportation’s deputy administrator for the highway division.
Where have we heard that before? Minnesota maybe?
For the record, 25% of the farmers at the August 19 meeting said they had more than 5 implements that would exceed the current proposals. Another 21% said they had 4-5 implements that would exceed them.
For dealers, getting equipment into your shops for set up and repair or delivering new equipment to your customers would also be subject to the regulation.