A law recently approved by the Texas legislature will exempt Texas farmers and ranchers from paying sales tax on GPS software, beginning Sept. 1.
The idea came from Dawson County farmer Billy Low when he discovered the bill for his GPS software subscription included tax.
“That didn’t make sense to me,” Low said. “If the equipment was tax exempt, then what I needed to run that equipment looked like it should be tax exempt also.”
Craddick then enlisted the help of Representative Tom Craddick and Kate Huddleston, chief of staff, to create a bill regarding the issue. Rep. Craddick and Senator Charles Perry then carried the bill through, Low said.
“Fortunately, I reached Kate Huddleston,” Low said. “She took the ball and got it rolling. I would sure give a world of credit to Kate Huddleston.”
The GPS is connected to a tractor guidance system that ensures accuracy when listing, planting and harvesting crops. With the guidance system, farmers are able to focus more on the equipment they are pulling behind the tractor, thus increasing performance.
Farmers are not the only ones who will benefit. This tax exemption, along with the increase in efficiency, will help reduce product prices for consumers, Low said.
“It just makes everything easier for us,” he added. “[The system] will basically drive the tractor from one end of the field to the other, and keep it on a straight line, much straighter than a human can drive it.”
This exemption will save sales tax for farmers across the state for just the software subscription alone, Low said.
“One person can make a difference, and I think that is something everybody needs to keep in mind,” he said.
The ruling states the GPS unit will have to be used for building and maintaining roads or water facilities, or in the production of food, grass, feed or other agriculture products sold in the normal course of business.
A registration number for the GPS software is required in order to receive tax exemption, and it must be included on the application for exemption.
Taxes owed on GPS devices prior to Sept. 1 will not be affected, and previously owed taxes on GPS equipment will not be forgiven.