For local farmers kicking the tires of a new swather or tractor, it will mean the local sales tax of about 7.75 percent will be slashed to about 2.75, depending on the city in which the farmer buys his new machines.
Scott Hester, general manager of Heber's Torrence's Implements and former president of the Far West Equipment Dealers of California, said his group has lobbied for such changes for years.
At Torrence's Heber location, Hester has made available and faxed out photocopied lists with phone numbers of Assembly members.
He said dealers and farmers, 5,000 strong, lobbied those members for a change in the rate because the farmers were paying more for farm equipment and dealers were losing customers to Idaho, Oregon and Arizona.
Hester said the lower rate is good news for three reasons.
1. Local farmers will save thousands of dollars when purchasing new equipment. On the purchase of a $100,000 tractor a farmer would save $5,000.
2. Cities such as Calexico and El Centro will still receive the same amount of tax revenue they had been taking in before the change. The 5 percent that has been lopped has been the state's cut of the sales tax.
3. Local dealers will not lose business to out-of-state dealers.
"Hopefully it will keep our business at home," Hester said.
He added, "We're one of only four states in the U.S. that has a full tax on agricultural equipment."
Farmers in 38 states do not pay sales tax on new agricultural purchases and some states waive the majority of sales tax, he said.
State budget analyst Pat Landingham said the changes will short the state more than $36 million in the first year and more than $42 million in subsequent years.
The timing of the change in California's rate could be doubly fortunate for area farmers.
Brad Poiriez, a senior manager with the county air pollution control office, said the California Air Resources Board is considering a plan to reduce emissions from agricultural combustion engines. This plan could make some old tractors rumbling around the Valley obsolete.
Holtville-area farmer Ben Abatti Jr. said he is working with the board so it will consider the concerns of local farmers.
New standards won't be issued any time soon, he said.
Abatti, along with Manuel Cunha of the Nisei Farmers League and Cynthia Cory of the California Farm Bureau, have been participating in meetings, examining the scientific data the board is using and making suggestions.
Abatti said he and his associates are trying to bring some real-world knowledge to the discussion on emissions.
He said local farmers have concerns with the validity of the scientific data the board is using and mitigation measures that have been proposed, such as exhaust traps that may or may not help cut a significant amount of toxins.
Poiriez said any impact of the board's "diesel toxic risk-assessment plan" on Valley farmers is all speculation until it takes action.
Staff Writer Aaron Claverie can be reached at 337-3419 or firstname.lastname@example.org