BISMARCK -- North Dakota should revive its sales tax on used farm machinery and funnel the money into programs that will expand the economy, a Fargo senator said Friday.
It's been barely six months since the tax was removed.
Sen. Tony Grindberg, R-Fargo, said the sales tax exemption for used farm machinery and parts will cost the state almost $9 million per two-year budget cycle.
In the last four years, the Legislature phased out the state's previous 3 percent sales tax on used farm machinery and parts, a move designed to help struggling farmers. The 1999 Legislature dropped it to 1.5 percent and the 2001 session removed it effective last July 1.
All other taxable sales in North Dakota are assessed a 5 percent state sales tax.
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Grindberg wants $2 million to beef up the "EPSCoR" program, state matching money used to win competitive federal research grants. It stands for "experimental program to stimulate competitive research."
He also wants $2 million more to activate the "Centers of Excellence," a program in which university research attracts industries who cluster around the college cities.
Sen. Randy Christmann, R-Hazen, doesn't like Grindberg's proposed repeal of the exemption. He said the word from the state's farm sector was that the exemption had helped make farm machinery more affordable to farmers, helped others fix equipment and had cleared a glut of used equipment from implement dealers' lots.
As worthwhile as Grindberg's ideas are for the extra money, he said, "I just don't think taking it out of the farm economy and from farmers most in need is a good thing.
"I thought after two sessions of duking that one out we were done."
Sen. Aaron Krauter, D-Regent, said the exemption helped eastern North Dakota implement dealers because Minnesota has no sales tax on farm machinery.
Grindberg said the agriculture sector already receives more than $67 million a biennium in sales tax exemptions.
He thinks the exemption he wants repealed was a popular but "a small, small gesture" that didn't help farmers much.
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"And I voted for it, too," he said.
Readers can reach Forum reporter Janell Cole at (701) 224-0830
