SALT Report 2434 – Arkansas’ Governor signed a Bill that provides a sales and use tax exemption for expendable supplies for farm machinery. Specific items included in the exemption are baling twine, net wrap, silage wrap, and cotton wrap that are used for baling, packaging, tying, wrapping, or items used to seal animal feed products. However, the exemption does not apply to supplies and parts used for maintenance, repair, or replacement purposes.
Currently Arkansas provides a sales tax exemption for farm machinery and equipment but it is limited to purchases by farmers engaged in the commercial production of food or fiber. The exemption established by this bill does not include the commercial farming use requirement.
Animal feed products – includes hay, straw, grass, fodder, silage, and other similar products
Farm machinery – includes implements used exclusively and directly in farming, including items used to harvest crops produced in farming. The exemption does not include implements used in the production and severance of timber, motor vehicles subject to registration, airplanes, or hand tools
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