The Alabama Senate could take up legislation to exempt farmers’ grain bins from ad valorem taxes as soon as Tuesday when the legislature returns from its spring break.

House Bill 400 is sponsored by State Rep. Wes Kitchens (R-Arab).

According to the synopsis, “Under existing law, ad valorem taxation applies to all real property in the state unless expressly exempted by law. This bill would provide that all grain bin structures and parts used for preparing a grain for market would be exempt from ad valorem taxation.”

The legislation received a favorable report from the Senate Finance and Taxation General Fund Committee during the most recent meeting of the Committee.

State Sen. Jim McClendon (R-Springville) stated that “a very similar bill” has already been given a favorable report in committee.

Sen. Greg Albritton (R-Atmore), who chairs the committee, said, “A very rural county came back and said this was a very important source of income for [them].”

Kitchens claimed that the impact of passing this legislation would only be $23,000.

“Farm implements are already exempt” from ad valorem taxes, Kitchens told the committee.

“I don’t think we exempt warehouses, what is the difference?” asked Sen. Arthur Orr (R-Decatur).

Sen. Tim Melson (R-Florence) said that the state will make money by encouraging farmers to build grain storage bins on their farms.

“Instead of taking [the crop] to market at harvest, he will hold his grain for a few months when the price is higher, and he will pay a lot more income tax,” Melson said. “He will be paying a lot more money to the state down the road.”

Sen. Larry Stutts (R-Sheffield) said, “I have a similar bill. This is a tax incentive to encourage farmers to put up a grain bin. The bins can be disassembled and taken off the property so it should not be taxed under ad valorem tax.”

HB400 received a favorable report.

Tuesday will be day 24 of the 2022 Alabama Regular Legislative Session. The legislature is limited by the 1901 Constitution to a maximum of thirty legislative days in a regular session but is not required to use all thirty of those days.

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