Ranchers hit hard by a wildfire in mid-December will get relief as they rebuild their operations, as Kansas Governor Laura Kelly signed legislation to create a sales tax exemption for ranchers. agricultural fencing supplies.
The fire burned more than 160,000 acres, including Russell, Ellis, Osborne and Rooks counties.
House Bill 2239, which creates the sales tax exemption on fencing supplies, is part of omnibus tax legislation with Senate overrides that provide tax cuts for disabled veterans , tax credits for teachers and other provisions sought by lawmakers on both sides of the aisle. The governor said all actions were made possible by a strong economic recovery following the COVID-19 pandemic.
“Our fiscal responsibility has put Kansas back on track,” Kelly said in a press release. “We have been able to fully fund our schools, repair our roads and bridges, balance the budget and reduce property taxes, which brings relief to the Kansans.”
A provision for farmers and ranchers means a sales tax exemption for the purchase of supplies needed to rebuild or repair fences on farmland damaged or destroyed by a natural disaster by providing tax relief to affected farmers and ranchers by recent forest fires. The exemption was created in light of the Four County fire in December 2021. Kelly had declared it a natural disaster.
The bill also helps other disaster-affected farmers and ranchers retroactive to January 1, 2021. Under the provision, to be eligible for the exemption, the property containing the fence must be located in a declared area. federal, state or local government disaster and purchases must be made within two years of the date of the applicable disaster declaration. For applicable purchases already made, taxpayers are entitled to a refund of sales tax upon presentation of the appropriate documentation.
Representative Troy Waymaster, a farmer and rancher from Bunker Hill, along with State Senator Elaine Bowers, R-Concordia, championed the legislation, and Waymaster was happy to see it finally passed. Waymaster, a Republican, is chairman of the House Appropriations Committee and had seen the damage firsthand, so he and Bowers got to work pushing through legislation.
Both lawmakers hoped it would be approved early in the session, but Waymaster said the bill was part of an overall package, which isn’t unusual. He was confident he would be approved and urged anxious breeders to be patient. He said the legislation was made retroactive to help Four County Fire ranchers and upgraded to help others who had been affected by disasters by having the January 1, 2021 effective date.
“I’m glad to see that we were able to get the wildfire part of the bill passed,” he said. “That will definitely help.”
Representative Boyd Orr, R-Fowler, a member of the House Agriculture Committee, believes that this provision should help not only the ranchers of Four County Fire, but also other producers who have been affected by fires and natural disasters since the 1st January 2021.
The bill also permanently eliminates sales tax on fence supplies after July 1 if they are used for personal property and services necessary to build, rebuild, repair or install fences. any fence used to enclose agricultural land.
Orr didn’t like this provision, but he understood that it was all part of a final bill. Orr believed the exemption should only be used to help producers in need and limited the scope to emergencies declared by local, state or federal governments.
Waymaster said the legislation was one the Senate wanted to see in the compromise bill and discussed earlier in the session. The Kansas Legislative Research Department estimates the plan will cost the state about $4 million in fiscal year 2023, though Waymaster thought the estimate was high and likely to have less impact.
An unrelated provision in the signed legislation expands the power of county commissioners to reduce property taxes for all buildings and farm improvements listed as disaster real estate. County Commissioners have the ability to reduce taxes in situations where such property has been damaged in a Governor-declared disaster and restoration costs are equal to or greater than 50% of the market value before the damage. A request for an abatement must be submitted before December 20 of the year following the natural disaster.
Orr recalled that after the Clark County fires five years ago, the county commission was unable to provide property tax relief, which would have helped speed the recovery. The change, he said, offers welcome flexibility.
“I think that’s a good example of the house rule,” Orr said. “It allows county commissioners to use their discretion with common sense management.”
Waymaster also thought it was a good addition to the overall bill and gives county commissioners another tool to help provide relief when farmers and ranchers are hit by a natural disaster, as it affects them differently than residents. urban.
The bill also provides that land used by zoos holding a Class C operating license issued by the United States Department of Agriculture and land used for the production of plants, animals or of horticultural products which are incidentally used for agritourism activity, which is defined by the draft law, is to be classified as land allocated for agricultural purposes of property taxation.
The bill clarifies that, beginning with the 2023 tax year, all agricultural land that is subject to the federal prairie conservation reserve program will be classified as grassland for property tax purposes.
