Agriculture community needs to talk about how tax preferences affect operations
Taxes. Need I say more?
Yes, because the last thing Washington farmers and ag businesses need in this risky business atmosphere is an increase in tax liability.
The constant nagging of this government-imposed pressure can do much to either stifle or grow businesses and the economy. In Washington, our agricultural and food processing sectors have benefited from the 63 ag tax preferences within Washington’s tax code, creating an environment that encourages farms and agricultural businesses to grow and settle in Washington. Losing these exemptions would significantly deter this growth in Washington state, so it is vital that farmers and agricultural businesses talk about what these preferences do for their daily decision making.
On Friday, July 20th from 1-4 p.m. in Yakima there is an opportunity to do just that, by attending the meeting hosted by the Tax Structure Work Group. This is your opportunity to attend the meeting to talk about how these preferences affect your daily decision making.
You can RSVP here: https://housetaxworkgroupyakima.app.rsvpify.com/
It might help for the Work Group to know that Washington’s agricultural industry already pays a large amount of taxes. Washington’s Department of Revenue estimates that for its 2017 Combined Excise Tax Returns (CETR), crop production businesses paid $6.7 million in taxes, animal production businesses paid $1.9 million, and support activities for agriculture paid $8.5 million in taxes. The CETR includes Business and Occupation Taxes, Public Utility Taxes, State Sales Tax, State Use Tax, and Other Taxes.
A study for tax alternatives for Washington state published in 2002 states: “The exemption for agricultural products is solely a legislative policy choice. It has been in law since the B&O tax was created in 1935. It was presumably enacted to aid an industry that was severely depressed in 1935. The exemption recognized low profit margins that prevailed in this industry, high transportation costs, and the fact that as a group farmers have little or no ability to affect the prices received for their products and were therefore unable to pass the cost of the tax on to their customers.”
The tax burden is likely to grow if these 63 exemptions disappear. One study estimated that the hypothetical savings of various farm savings due to these tax exemptions range from $5.60 per acre to $11.20 per acre. The loss of these exemptions would be added costs on farmers who have no way to pass the added expense on to their customers. Please attend if possible.