Farmers, Lawmakers Looking to Repeal Service Tax

Posted at: 08/19/2013 6:25 PM
By: Jenna Lohse

(ABC 6 NEWS) -- Since the beginning of July some local farmers have had a case of sticker shock.
There's a little known tax lawmakers added at the end of the session to the overall tax package. It's a farm equipment service tax and both farmers and lawmakers want to undo what they call a mistake.
Tractors and combines, both vital parts on a thriving Minnesota farm this time of year.
"You can't operate without it, if something breaks down you have to fix it," said Eugene Anderson, Gene’s Dairy Farm in Waltham, MN.
Eugene Anderson has been farming all his life and says keeping his equipment in working order is a big part of the job.
"If it needs to get fixed, it's going to get fixed. I mean you can't be playing games," said Anderson.
Which is why paying more on labor for farm equipment repair isn't the best news.
"If you have much work done like on a combine, I mean, you can easily run up a ten thousand dollar bill, the tax would be substantial," said Anderson.
SEMA Equipment in Austin takes in all kinds of machinery in need of repairs. Since the repair tax just went into effect July 1st, some farmers aren't aware of the new tax until they get their bill.
"On an average repair bill you're looking at probably 150 to 200 dollars in taxes," said Ron Nelson, Service Manager at SEMA Equipment.
The farm equipment repair tax was tacked on at the last minute during the 2013 legislative session.
"It didn't receive as much scrutiny as it needed to have and now that people had a chance to absorb it a little bit, they're concerned about it," said DFL Rep. Jeanne Poppe of Austin.
Governor Dayton has signaled a willingness to put a repeal on the agenda of a possible special session next month.
"I think you'd hear from the majority if not all of the legislatures who have at least constituents who have contacted them, they've heard from them and they'd like to see it go back to the way it was," said Poppe.
"I would just hope that they would appeal it and do away with it because like I say, I think it's an unnecessary tax," said Anderson.
Representative Poppe says that if there ends up not being a special session next month, the farm equipment repair tax will still be up for discussion during the next legislative session in February.