Legislative Update
To find information on legislation, committees, and schedules, visit www.legislature.idaho.gov.
Legislative Summary & Weekly Green Sheet: www.foodproducersofidaho.org/legislative.html
2024 Ag All Stars: www.foodproducersofidaho.org/ag-all-stars
H87: Harvest Equipment Exemption Update
During the 2018 legislative session, a bill that allowed hop producers to exempt their hop production or harvest machinery from property taxation was supported by the agriculture industry and passed. At that time, all production equipment used in the harvest of a commodity was exempt by statute, but there were county assessors that were inconsistently evaluating harvest equipment for hops. Through the summer, more examples of inconsistencies surfaced which led to a tour with legislators, the Idaho State Tax Commission and county assessors to provide a better understanding of what harvest equipment is and the different methods used to harvest a diverse number of commodities. One of the commodities that have been inequitably taxed was honey.
This culminated in H87 for the 2019 Legislative Session that clarifies that all agricultural operations be assessed similarly for farm equipment and machinery. Though many counties in Idaho have a long history of accurately and equitably assessing harvest equipment, there have been a number of assessors that have rendered evaluations contrary to state statute. They also inconsistently assessed harvest equipment for some commodities and not for others. These improper assessments have been in contrast to the guidelines most counties have followed on harvesting equipment. H87 will provide legislative intent language to give guidance for assessors when they may be in doubt. H87 addresses a number of commodities that have been assessed unpredictably. It goes on to state that there may be other types of machinery or equipment used exclusively for the production or harvest of agricultural commodities that should have received this exemption but were denied the exemption in the past. The most important clarification in H87 is that the definition of “harvest” includes all activities necessary for a raw agricultural commodity to be put into its most basic salable form. The definition includes on-farm storage of the commodity before it is first handled in the primary channels of trade. H87 passed the House 67-1-2. In the Senate, H87 passed 30-3-2. Since passing through both chambers, H87 has been signed by the governor and will be retroactive to January 1, 2019.
Contributed by Patxi Larrocea-Phillips (AMG)
During the 2018 legislative session, a bill that allowed hop producers to exempt their hop production or harvest machinery from property taxation was supported by the agriculture industry and passed. At that time, all production equipment used in the harvest of a commodity was exempt by statute, but there were county assessors that were inconsistently evaluating harvest equipment for hops. Through the summer, more examples of inconsistencies surfaced which led to a tour with legislators, the Idaho State Tax Commission and county assessors to provide a better understanding of what harvest equipment is and the different methods used to harvest a diverse number of commodities. One of the commodities that have been inequitably taxed was honey.
This culminated in H87 for the 2019 Legislative Session that clarifies that all agricultural operations be assessed similarly for farm equipment and machinery. Though many counties in Idaho have a long history of accurately and equitably assessing harvest equipment, there have been a number of assessors that have rendered evaluations contrary to state statute. They also inconsistently assessed harvest equipment for some commodities and not for others. These improper assessments have been in contrast to the guidelines most counties have followed on harvesting equipment. H87 will provide legislative intent language to give guidance for assessors when they may be in doubt. H87 addresses a number of commodities that have been assessed unpredictably. It goes on to state that there may be other types of machinery or equipment used exclusively for the production or harvest of agricultural commodities that should have received this exemption but were denied the exemption in the past. The most important clarification in H87 is that the definition of “harvest” includes all activities necessary for a raw agricultural commodity to be put into its most basic salable form. The definition includes on-farm storage of the commodity before it is first handled in the primary channels of trade. H87 passed the House 67-1-2. In the Senate, H87 passed 30-3-2. Since passing through both chambers, H87 has been signed by the governor and will be retroactive to January 1, 2019.
Contributed by Patxi Larrocea-Phillips (AMG)