Yes, farmers pay taxes: A review of taxation imposed on Washington state farmers and ranchers
- Some critics claim Washington state farmers pay little or no taxes. That is not true.
- Farmers and ranchers pay the B&O tax.
- Farmers pay self-employment taxes and all state and federal payroll taxes.
- All farmers pay sales or use tax on equipment. Washington is one of only two states to impose such a tax.
- Like other wholesale industries, farmers do not pay retail sales tax on inputs, like feed, seed, fertilizer, equipment maintenance and parts, fuel, fencing, and similar items.
- Washington state farmers and ranchers pay an average of $403,410,000 in total property taxes statewide.
- In all, the estimated 2018 taxes paid by farmers and ranchers in Washington totaled $922,849,403.
Agriculture is an intrinsic part of Washington state’s economy, providing its second largest driver of growth, income, and jobs. Contrary to some claims, farmers provide a great deal of revenue for state and county governments through tax collection.
This study examines the claim that farmers and ranchers in our state “do not pay any taxes; none whatsoever.” This study describes the various tax categories including Business and Occupation (B&O), property, retail sales, and self-employment and payroll taxes that farmers and ranchers pay. As the economics of farming becomes more difficult, this study provides a better understanding of where our food dollars go and how farmers and ranchers maintain their livelihoods while contributing to the larger state economy.
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