Rep. Gutwein has introduced HB 1265 concerning drainage water management. “Drainage water management system” is defined as “a subsurface system of drainage, tubing, drainage tiles, water flowgates, control valves, and related control systems designed to facilitate controlled water drainage from agricultural land used for crop production.”
If a person acquiring a component of a drainage system is engaged in the business of agriculture, the component would be exempt from sales tax. I’m not sure that this should necessarily be limited to only those engaged in the business of agriculture, but otherwise I think I support it. The story of drainage in the state is largely unappreciated (at least outside of the agricultural community) and so important to the development of the state.
When drainage is working properly, you barely think about it. When it’s not working, there are few things that make you feel more powerless. (I say this as the owner of a basement.) I’m guessing a little bit here, but from maybe 1880 through the 1930s, a huge amount of drainage infrastructure was constructed in Indiana. I’d be hard pressed to say whether our drainage infrastructure or our road infrastructure is more extensive. In any case, a lot of the drainage is getting long in the tooth and needs maintenance and reconstruction. I’m more familiar with this in the context of public regulated drains, but I expect private drains are similar.
Well constructed drains tend to benefit everyone in the watershed — water does not respect property lines. Seems like we could do worse than assisting with drainage infrastructure by providing a sales tax exemption.
In general I am not in favor of poking more holes into rules — in this case an exemption to sales tax. We already have enough holes including some that can be abused. It seems better to provide a positive incentive if the state wishes to encourage drainage systems.