Tax repeal could help equipment sales

Capital Press Staff Writer


TULARE, Calif. - Farm equipment manufacturers and dealers say they’ve seen an increase in sales since the state repealed sales tax on new equipment purchases.

In July of 2001, California legislators approved a budget bill that granted tax relief to the state’s producers. Now, more than a year after equipment sales became tax-free, dealers are noticing a slight difference.

“The sales tax exemption was a good incentive,” said Gary Gebhard, a manufacturing agent for Servis-Rhino, which manufactures diggers, mowers and backhoes. “It was a definite plus for sales.”

In fact, Gebhard said the new law was so anticipated by farmers and ranchers that equipment sales came to a grinding halt the month before the legislation went into effect.

A handful of equipment dealers and manufacturers attending the 2003 World Ag Expo in Tulare agreed that they’ve seen an increase in sales with the tax exemption. Some even believe it’s helped keep some businesses going while others have had to close their doors.

“We have quite a few dealers up and down the (Central) Valley, and we’ve noticed an increase in sales over the past year,” said Bob Rear, one of the owners of Rears Manufacturing Co., based in Eugene, Ore.

Sales representatives for a major orchard equipment manufacturer also agreed they’d seen a spike in sales recently — which they attribute to the difference in sales tax.

But while dealers are pleased with an increase in sales, they still hope they could see more benefits from the sales tax repeal.

Gebhard said he’d like to see the exemption extended to used machinery as well as new equipment.

“(Farmers) should have held out for the whole package,” he said.

Small farm products also don’t benefit from the sales tax exemption. That is frustrating for Jim Taylor, who manufactures ties used for grapevines.

Still, the industry is thankful, especially during hard economic times, that the bottom line has been improved for some.

“We’ve held our own in the sales department,” Gebhard said, adding that regardless of the exemption, some companies have had to close their businesses.


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