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Bill would clarify titles and sales-tax treatment for self-propelled farm equipment; bankers ask for lien-transition language
Summary
Sen. Dan McKeon asked the committee to approve LB 490, a technical statutory change to permit titles for self-propelled agricultural equipment used exclusively off-road without triggering sales tax, addressing inconsistent county treasurer practice.
Sen. Dan McKeon introduced LB 490 to clarify that certain self-propelled agricultural equipment used exclusively off-road — examples cited included self-propelled feed trucks, fertilizer applicators and other implements of animal husbandry — may be issued certificates of title without triggering sales tax that would otherwise apply to titled motor vehicles.
“LB 4 90 clarifies any questions about which taxes are to be paid, allowed for the titles to be issued at the point of sale without paying sales tax for the equipment not used on the public roads,” Sen. McKeon said. He described recurring dealer complaints that purchasers of off-road, self-propelled agricultural equipment face inconsistent treatment at county treasurers’ offices and sometimes are required to pay sales tax even though the equipment is exempt as farm implements used exclusively off-road.
Jake Pullen of Nebraska Cattlemen and a representative of several agricultural groups told committee members that the statute’s definitions are clear about implements used in animal husbandry and other agricultural production, but county practice has not always followed that reading. “We believe that the current statutes are clear that feed trucks used exclusively on farm are not motor vehicles and should not be charged sales tax at the transfer of title,” Pullen said, urging passage of clarifying language.
Several proponents explained why a certificate of title is needed in practice even for off-road equipment: titles are used to record lien positions so banks can secure financing. The Nebraska Bankers Association appeared in a neutral position and asked the committee to add a transition provision modelled on a prior statutory transition (for recently titled ATVs/UTVs) so that financing statements filed under the Uniform Commercial Code continue to protect lienholders when an item becomes subject to title issuance.
No opponents testified at the hearing. Senator McKeon said he would accept the bankers’ amendment and asked the committee to advance the bill with that change. The committee did not take a vote during the hearing.
