Senate Finance Committee to study agricultural sales tax exemptions

The agricultural industry has a significant impact on Oklahoma’s economy, and Senate Agriculture and Wildlife Committee vice chairman Roland Pederson said it’s time to review who qualifies for agricultural sales tax exemptions in the state.

An interim study – “Finding a pathway for equitable farm tax exemptions” – will take a deep dive into this issue in the Senate Finance Committee on Monday, Sept. 13 at 10:30 a.m.

Pederson said the Oklahoma Tax Commission recently changed the process to getting an agricultural sales tax exemption card, and he’s heard from many farmers and ranchers from across the state who’ve had difficulties getting or renewing their exemption. Cards must be renewed every three years.  

“We need to conduct a fair assessment to verify legitimate farmers and ranchers when approving agricultural sales tax exemptions,” Pederson, R-Burlington, said. “While we don’t want to grant exemptions to individuals who don’t qualify and aren’t actually producers, we also don’t want to prohibit exemptions to those who are trying to make a living in ag.”

Currently, in order to qualify for an agricultural exemption card, an applicant must provide one of the following: an IRS Schedule F, IRS form 1065, or IRS form 4835, or any equivalent form prescribed by the IRS; a one-page business description form provided by the Oklahoma Tax Commission (OTC); a Farm Service Agency 156EZ; or other documents at the discretion of OTC to verify active agriculture production.

“While there are currently several options producers can show to prove their agricultural production status, none of these account for individuals who are just entering the industry and have never filed a Schedule F, or even older individuals who don’t make enough income to file taxes,” Pederson said. “The bottom line is we want to make sure there’s a path for producers of all types and kinds to qualify for the exemption – if they are legitimate.”

Study presenters will include Mandy Snyder, Noble County Assessor; Keith Kisling, Alfalfa County farmer and rancher; RJ Gray, Oklahoma Agricultural Cooperative Council president and CEO; and Steve Thompson, Oklahoma Farm Bureau senior director of public policy.

The study will be held at the Oklahoma State Capitol in room 535. It will also be livestreamed at www.oksenate.gov.