2009 Legislative Agenda
TAAA – Implications of Legislation Passed During 81st Texas Legislature
The 81st session of the Texas Legislature was an overwhelming success for agricultural aviation operators in this state. TAAA’s top priority for the legislative session was accomplished with the passage of S.B. 958 by Senator Glenn Hegar and Rep. Joe Heflin, which clarifies the application of the sales tax exemption for airplanes and equipment used in spray plane operations. Rep. Yvonne Gonzalez Toureilles also passed legislation containing the language supported by TAAA. Texas law has long exempted machinery and equipment used exclusively in the production of agricultural products from the state sales and use tax. The comptroller’s office has long held that such an exemption extends to airplanes used in spray operations. However, there was some concern that the federal definition of agricultural aviation operation was broader in scope than the state’s definition used in the Tax Code. As a result, some activities that could have been considered within the scope of an agricultural aviation operation in the eyes of the FAA could have resulted in the forfeiture of the agricultural exemption for sales tax purposes, resulting in tens of thousands of dollars owed in back taxes for airplanes and equipment purchases.
TAAA worked with legislators to develop language that would clarify the agricultural exemption by tying the exemption to the federal definition of “agricultural aircraft operation” used by the FAA. The federal definition defines the term as “the operation of an aircraft for the purpose of (1) dispensing any economic poison, (2) dispensing any other substance intended for plant nourishment, soil treatment, propagation of plant life, or pest control, or (3) engaging in dispensing activities directly affecting agriculture, horticulture, or forest preservation, but not including the dispensing of live insects.” Federal law further provides that “economic poison means (1) any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any insects, rodents, nematodes, fungi, weeds, and other forms of plant or animal life or viruses, except viruses on or in living man or other animals, which the Secretary of Agriculture shall declare to be a pest, and (2) any substance or mixture of substances intended for use as a plant regulator, defoliant or desiccant.”
S.B. 958, which takes effect September 1, 2009, amends the Texas Tax Code to provide that any activity described under the federal definition is an exempt use for state sales tax purposes. As a result, any questions regarding the tax status of activities such as spraying on grass or forest fires, as well as applications for mosquito control, are resolved. Under the new law, such activities will clearly be entitled to the agricultural exemption, as they fall within the federal definition of agricultural aviation operation. The legislation eliminates any lingering confusion about the agricultural exemption as it applies to agricultural aircraft operations, and its passage is a tremendous success for TAAA and its members.
Texas Rulings
Articles of Interest
Pesticide Critics Send Wish List to Obama
Fuel Tax Article
House Rules Analysis 1/2009
Part of the Lone Star State Now the Driest Region 2/2009
Farm Bureau Highlights the Drought of 2009 3/2009
Boll Weevil Update 3/2009
FMC Response to the CBS 60 Minutes Story Regarding Furadan 3/2009
TAAA Ag Air PAC endorses Gov. Rick Perry 1/2010
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