Vol. VII No. 5
September / October 2013
Serving Soil, Mulch, Compost, & Biofuel Professionals www.SoilandMulchProducerNews.com
NEWS
Attention Readers !
Are you looking for Products, Equipment or Services for your business? If so, please check out these leading companies advertised in this issue:
Bagging Systems
Amadas Industries – pg 5 Hamer LLC – pg 15 PremierTech Chronos – Insert
Biomass Systems Biomass Combustion Systems – pg 12
Buildings & Structures ClearSpan – pg 20
Clutch Parts Foley Engines – pg 21
Compost Equipment HCL Machine Works – pg 21
Dust Suppression & Odor Control Buffalo Turbine – pg 5
Mulch Coloring Equipment/Colorants AgriCoatings – pg 14 CMC Milling – pg 12 Colorbiotics – pg 9
Shredders, Grinders, Chippers & Screening Systems Allu Group Inc – pg 8 Bandit Industries – pg 13 CW Mill Equipment Co. – pg 6 Doppstadt – pg 23 Morbark Inc – pg 2 Peterson – pg 7 Premier Tech Chronos – Insert Rayco Mfg – pg 16 Rotochopper Inc – pg 11 Screen Machine Inds – pg 19 Screen USA – pg 20 West Salem Machinery – pg 24
Transport Trailers Travis Trailers – pg 10
Trommel Brushes Duff Brush LLC – pg 16
Used Equipment EarthSaver Equipment – pg 21
Compost, Mulch Sales Tax Prompts Battle in Vermont
F
By P.J. Heller
ertilizers and pesticides are in. Compost and mulch are out. At least that’s the case when it comes to sales tax exemptions for agricultural products in Vermont, a situation which has left compost and mulch producers in a quandary with at least one mulch producer facing a back tax bill of more than $400,000 -- which could force him out of business -- and a compost manufacturer with a back tax bill of $116,000. The tax situation is “clearly a discriminatory tax against organic practice,” says Karl Hammer, owner of Vermont Composting Co., in Montpelier. “For most people, it’s pretty clear that since farmers do not pay tax on fertilizer in Vermont or any inputs that go into the production of crops, to tax them when they buy compost and potting soil made with compost . . . is clearly a discriminatory tax against organic practice,” he says. “If we are going to ‘walk the talk’ of caring for the planet, we should be doing everything we can to increase the use of compost products, including not taxing it,” adds Paul Sagui, director of the Composting Association of Vermont (CAV). Hammer earlier this year appealed a back tax bill of some $116,000 from the state, which
contends he failed to collect and pay the 6 percent sales tax on compost sales from 2009, 2010 and 2011. He has not received a tax bill for 2012 or 2013. He founded the business in 1992. Kevin Barrup, co-owner of Green Mountain Mulch in Derby, Vt., has been hit with a tax bill, including penalties and interest, of $409,344.15 for the years 2010 through 2012. The business has been in operation since 1978. Hammer and Barrup tell similar stories. They both admit they never collected the sales tax, saying they had been advised earlier by tax officials that their products were exempt from the tax. “The problem is everybody who calls gets different answers,” Barrup says. “There’s no rhyme or reason to what they’re doing and there’s no common sense to it either.” When asked specifically about compost, Jeffrey M. Dooley, lead tax policy analyst for the Vermont Department of Taxes, says “compost has never been exempt” from state sales tax. The state in 2009 clarified what items used in agricultural production were tax exempt. Compost and mulch were not included on the list. According to the 2010 Vermont Sales Tax and Continued on page 3