Naveen Adusumilli | 11/15/2016 9:37:37 PM
Agricultural producers have historically been exempted from tax on the purchase of poly roll tubing, which is used for farm irrigation, and on the purchase of off-road diesel fuel, which is diesel purchased for farm operations. Recent legislation passed a tax on poly roll tubing and off-road diesel fuel. The tax rate for poly roll tubing is 5% starting April 1, 2016, to June 30, 2016, and 3% from then on until July 1, 2018, and the tax rate for diesel fuel is 1% starting April 1, 2016, until July 1, 2018. The two statutes are presented in the table below.
|Statute||Description||FY 2015-16* tax rate||FY 2016-2018 tax rate|
|LA R.S. 47:305.37||Sale of Diesel fuel, Butane, propane , or other liquefied petroleum gases used for farm purposes||1%||1%|
|LA R.S. 47:305.63||Sale of poly roll tubing used for commercial farm irrigation||5%||3%|
*Fiscal Year (FY) is July 1 - June 30.
More than 75% of the irrigated acres in Louisiana are watered by polypipe. As a result, the tax on poly roll tube is expected to affect a great number of farmers. Presented in the attached document is the economic impact of these legislative changes on the overall net returns.
The LSU AgCenter and the LSU College of Agriculture