Plans for a proposed bill to remove farm equipment deals from Alabama's sales tax have been welcomed by a local equipment dealer.
According to The Associated Press, State Rep. Paul Lee, R-Dothan, said he will sponsor a bill to exempt agricultural equipment from the state's sales tax, which is 1.5% for such transactions.
The move would help Alabama companies compete with sellers in neighboring states since Florida, Georgia and Tennessee already exempt such transactions from their sales tax, Lee said.
"I think that would be great," said Louis Haney of Haney Equipment on U.S. 72 in Athens. "We’re close enough (to Tennessee) that it would make a difference."
Coincidentally, Haney said he had a customer from Tennessee looking for parts Saturday morning and mentioned the tax exemption.
"A (customer) from Tennessee was just in here," he said. "He had a tax-exempt certificate and asked if we could honor it.
"I told him we couldn’t because we didn't have the exemption. He bought the parts, anyway, because we were the only ones who had them."
However, Haney said he could have lost the sale because Alabama doesn’t exempt agriculture equipment — including parts — from the sales tax.
The cost of such a law isn't known because the Legislative Fiscal Office has not analyzed the bill, which Lee intends to introduce for the upcoming session, the AP reported.
Lee said any lost revenue would be made up by business being retained in Alabama.
Large farm tractors can cost from $250,000 to $700,000. Not having to pay the sales tax could save consumers thousands, he said.
"It's not about lost revenue," Lee said. "It is about trying to stop money from leaving the state. We're not building an environment for businesses."
Haney said he and others have lost business to dealers in Tennessee — particularly some "big ticket" equipment.
"I know combines and cotton-pickers have been bought across the state line," he said. The exemption "would be a great thing, not just for us, but for the whole state.
"Maybe our (representatives) can help out, too."
The Associated Press contributed to this report.