"NEW SECTION.  Sec. 1   A new section is added to chapter 82.08 RCW to read as follows:
     (1) The tax levied by RCW 82.08.020 does not apply to the sale to a farmer of replacement parts for farm machinery and equipment.
     (2) A person claiming an exemption under this section must keep records necessary for the department to verify eligibility under this section. An exemption is available only when the buyer provides the seller with an exemption certificate in a form and manner prescribed by the department. The seller shall retain a copy of the certificate for the seller's files.
     (3) The definitions in this subsection apply to this section.
     (a) "Agricultural products" has the meaning provided in RCW 82.04.213.
     (b) "Farmer" means a farmer as defined in RCW 82.04.213 whose gross proceeds of sales of agricultural products grown, raised, or produced by that person is at least ten thousand dollars in the calendar year in which an exemption under this section is claimed.
     (c) "Farm machinery and equipment" means machinery and equipment used primarily for growing, raising, or producing agricultural products. "Farm machinery and equipment" does not include:
     (i) Farm vehicles and other vehicles as those terms are defined in chapter 46.04 RCW, except farm tractors as defined in RCW 46.04.180 and other farm implements. For purposes of this subsection (3)(c)(i), "farm implement" does not include lawn tractors and all-terrain vehicles;
     (ii) Aircraft;
     (iii) Hand tools and hand-powered tools; and
     (iv) Property with a useful life of less than one year.
     (d) "Replacement parts" means those parts that replace an existing part, or which are essential to maintain the working condition, of a piece of farm machinery or equipment. However, "replacement parts" shall not include paint, fuel, oil, grease, hydraulic fluids, antifreeze, and similar items.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.12 RCW to read as follows:
     (1) The provisions of this chapter do not apply in respect to the use by a farmer of replacement parts for farm machinery and equipment.
     (2) The definitions and recordkeeping requirements in section 1 of this act, other than the exemption certificate requirement, apply to this section.

NEW SECTION.  Sec. 3   This act takes effect July 1, 2006."