Virginia Senate Bill SB985

Virginia 2023 Regular Session

• Introduced: 1/6/23
• Refer: 1/6/23

Caption

Retail Sales and Use Tax; agricultural exemptions, structural construction materials.

Impact

The proposed changes in SB 985 could fundamentally alter how local farmers and agricultural businesses engage with state tax regulations concerning construction materials. By exempting specific agricultural production materials from sales tax, the bill aims to encourage investment in agricultural infrastructure and support the overall growth of the sector. Proponents believe this will enhance the competitiveness of Virginia's agriculture industry by lowering operational costs for farmers, particularly those involved in expanding or improving their facilities.

Summary

Senate Bill 985 seeks to amend §58.1-609.2 of the Code of Virginia to expand the list of agricultural exemptions from state sales and use tax. The bill specifically targets structural construction materials necessary for agricultural production, allowing these materials to be exempt from taxation when sold to or purchased by farmers and contractors for qualifying uses. This adjustment intends to relieve some financial burdens on agricultural producers by making it easier for them to acquire necessary materials without the added cost of sales tax.

Contention

Despite the potential benefits, there may be points of contention regarding the broadening of tax exemptions in the context of public revenue. Critics of the bill could argue that extending sales tax exemptions may lead to decreased state revenue, which could affect funding for essential services. There could also be concerns regarding how such exemptions are defined and monitored, particularly whether the intended agricultural use is clearly delineated to prevent misuse by businesses that fall outside the agricultural sphere.