Morthland Proposes Sales Tax Exemptions for IL Farmers

State Representative Rich Morthland (R-Cordova) has filed legislation offering sales tax exemptions for Illinois farmers. House Bill 3817 exempts the sales tax imposed on fence posts, fencing, and farm gates. House Bill 3818 exempts the sale tax imposed on baling twine, baling wire, plastic bags, plastic sleeves, and plastic sheeting.

Representative Morthland, a seventh generation Illinois farmer, explained that farmers cross the Mississippi River to Iowa to make agricultural supply purchases because Iowa has a more favorable tax structure.

“Every time a farmer crosses the river to buy agricultural products, the State of Illinois loses employment potential and revenue opportunities on all of the purchases made that currently do not qualify for the sales tax exemption,” Morthland said.

Morthland’s legislation requires that the purchaser certifies the items will be used for farm production.

“Sales taxes on agricultural production goods act like a cumulative value added tax which, incidentally, Illinois rejected under Rod Blagojevich,” Morthland said. “Some people will look at this like, ‘it’s just fence materials and twine,’ but to the Illinois farmer who buys in bulk, these taxes can be burdensome.”