SENATE BILL REPORT
SB 5765
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
As of February 12, 2007
Title: An act relating to the sales and use taxation of repairs to farm machinery and equipment.
Brief Description: Concerning the sales and use taxation of repairs to farm machinery and equipment.
Sponsors: Senators Rasmussen and Schoesler.
Brief History:
Committee Activity: Agriculture & Rural Economic Development: 2/12/07.
SENATE COMMITTEE ON AGRICULTURE & RURAL ECONOMIC DEVELOPMENT
Staff: Bob Lee (786-7404)
Background: The state sales and use tax rate is 6.5 percent. In addition, cities, counties, and
transit districts may impose local option sales and use taxes for general purposes as well as a
variety of specific purposes. As of December 2005, local rates ranged from 0.5 percent to 2.4
percent.
In 2006, farmers became exempt from sales and use tax on the purchase of replacement parts for
farm machinery and farm equipment if their income from growing, raising, or producing
agricultural products is at least 10,000 dollars in the calendar year.
Other vehicles, not including farm tractors and farm implements, used only incidentally on or
moved along public highways for the purpose of going from one farm to another are defined as
farm vehicles. The 2006 exemption from sales and use tax did not apply to replacement parts
for farm vehicles.
Summary of Bill: Labor and services to install parts on farm machinery and equipment is exempt from sales tax.
Appropriation: None.
Fiscal Note: Available.
Committee/Commission/Task Force Created: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.