Farm machinery sales tax

AN ACT Relating to a sales and use tax exemption for qualifying 1
farm machinery and equipment; adding a new section to chapter 82.08 2
RCW; adding a new section to chapter 82.12 RCW; creating new 3
sections; providing an effective date; and providing expiration 4
dates. 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. (1) The legislature finds that agriculture 7
is a vital component of society and that United States agriculture 8
has many problems that are increasing in severity. The legislature 9
further finds that the country is relying on fewer and larger farms 10
that are hundreds of miles away from many population centers and that 11
the COVID-19 pandemic demonstrated how that can be dangerous, 12
unsecure, and result in higher prices and empty shelves. The 13
legislature further finds that the United States department of 14
agriculture's national agricultural statistics indicates that the 15
number of United States farms has been in steady decline for several 16
decades with farmland consolidation into a smaller number of very 17
large farms.18
(2) The legislature intends to increase the competitiveness and 19
financial stability of small and medium-sized agricultural producers 20
located in the state of Washington that have an annual gross income 21
S-0287.1
SENATE BILL 5092
State of Washington 69th Legislature 2025 Regular Session
By Senators Boehnke, Chapman, Dozier, Krishnadasan, Muzzall, and
Wagoner
Prefiled 12/20/24. Read first time 01/13/25. Referred to Committee
on Agriculture & Natural Resources.
p. 1 SB 5092
of less than $2,000,000 by providing these agricultural producers a 1
sales and use tax exemption that will reduce the cost of farm 2
equipment valued above $10,000 used directly for crop production.3
NEW SECTION. Sec. 2. A new section is added to chapter 82.08 4
RCW to read as follows: 5
(1) Subject to the conditions and requirements in this section, 6
the tax levied by RCW 82.08.020 does not apply to the sale of 7
qualifying farm equipment to an eligible farmer. 8
(2) The exemption authorized under this section is available only 9
when the buyer provides the seller with an exemption certificate in a 10
form and manner prescribed by the department. A buyer claiming an 11
exemption under this section must keep records necessary for the 12
department to verify eligibility under this section. Instead of an 13
exemption certificate, a seller may capture the relevant data 14
elements as allowed under the streamlined sales and use tax 15
agreement. The seller must retain a copy of the certificate or the 16
data elements for the seller's files. 17
(3) To qualify for the exemption under this section and section 3 18
of this act, the qualifying farm equipment must have been acquired by 19
the eligible farmer at a sales price of $10,000 or more.20
(4) To qualify for the exemption under this section and section 3 21
of this act, either the gross sales or harvested value, or both, of 22
agricultural products and bee pollination services of the eligible 23
farmer in combination with all affiliates of the eligible farmer may 24
not exceed the farm income threshold. 25
(5) An eligible farmer may not claim the exemption under this 26
section and section 3 of this act more than once, in total, each 27
calendar year. 28
(6) The definitions in this subsection apply throughout this 29
section unless the context clearly requires otherwise.30
(a) "Affiliate" has the same meaning as provided in RCW 31
82.04.299. 32
(b) "Agricultural products" and "farmer" have the same meanings 33
as provided in RCW 82.04.213. 34
(c) "Eligible farmer," "harvested value," "qualifying farm 35
machinery and equipment," and "tax year" have the same meanings as 36
provided in RCW 82.08.855. 37
(d) "Farm equipment" includes, but is not limited to, tractors, 38
trailers, combines, tillage implements, balers, and other equipment, 39
p. 2 SB 5092
including attachments and accessories that are used in the planting, 1
cultivating, irrigation, harvesting, and marketing of agricultural, 2
horticultural, or livestock products, but does not include motor 3
vehicles designed or intended for use upon public roadways as defined 4
in RCW 46.70.011 or motorcycles. 5
(e)(i) "Farm income threshold" means $2,000,000 in either gross 6
sales or harvested value, or both, of agricultural products and bee 7
pollination services in the preceding tax year. 8
(ii) By December 2030, the department must adjust the farm income 9
threshold by one plus the percentage by which the most current 10
consumer price index available on December 1, 2030, exceeds the 11
consumer price index for the prior 60-month period, and rounding the 12
result to the nearest $1,000. The department must publish the 13
adjusted farm income threshold on its public website by December 14
31st. The adjusted farm income threshold calculated under this 15
subsection (6)(e)(ii) applies to purchases made on or after January 16
1, 2031. 17
(7) This section expires October 1, 2035. 18
NEW SECTION. Sec. 3. A new section is added to chapter 82.12 19
RCW to read as follows: 20
(1) The tax levied by RCW 82.12.020 does not apply to the use of 21
qualifying farm equipment by an eligible farmer. 22
(2) The conditions, requirements, and definitions in section 2 of 23
this act apply to this section. 24
(3) This section expires October 1, 2035. 25
NEW SECTION. Sec. 4. (1) This section is the tax preference 26
performance statement for the tax preferences contained in sections 2 27
and 3, chapter . . ., Laws of 2025 (sections 2 and 3 of this act). 28
This performance statement is only intended to be used for subsequent 29
evaluation of the tax preferences. It is not intended to create a 30
private right of action by any party or be used to determine 31
eligibility for preferential tax treatment.32
(2) The legislature categorizes the tax preferences in sections 2 33
and 3 of this act as one intended to provide tax relief for certain 34
businesses or individuals, as indicated in RCW 82.32.808(2)(e).35
(3) By January 1, 2034, the joint legislative audit and review 36
committee must evaluate, at a minimum: 37
p. 3 SB 5092
(a) The fiscal impact of the exemptions created in sections 2 and 1
3 of this act; and 2
(b) Changes in the number of small and medium-sized agricultural 3
producers located in the state of Washington. 4
(4) In order to obtain the data necessary to perform the review, 5
the joint legislative audit and review committee may refer to the 6
census of agriculture published by the national agricultural 7
statistics service within the United States department of agriculture 8
and fiscal estimates provided by the department of revenue.9
NEW SECTION. Sec. 5. This act applies to sales or uses that 10
occur on or after October 1, 2025.11
NEW SECTION. Sec. 6. This act takes effect October 1, 2025.12
--- END ---
p. 4 SB 5092