February 2, 2011
www.gfb.org
Vol. 29 No. 5
GFB ENDORSES TAX COUNCIL FINAL REPORT On January 27, the Georgia Farm Bureau Board of Directors unanimously endorsed the final report of the Special Council on Tax Reform & Fairness for Georgians. The tax council recommended the General Assembly retain the state’s current sales tax exemptions for farm input costs. The report also urged legislators to expand the sales tax exemptions to include other input costs not currently exempt from sales tax, such as fuel, propane and other energy costs. “Our board of directors unanimously endorsed this report because when you look at it in its entirety, it’s good for agriculture and it’s good for Georgia’s economy,” said GFB President Zippy Duvall. “We commend the council for their work.” The tax council was created by the General Assembly last year with the passage of House Bill 1405. This legislation charged the council to study Georgia’s tax code and make recommendations for changes. The council was made up of economists and business leaders from across the state. The council’s report, as outlined by HB 1405, is now with the Special Joint Committee on Georgia Revenue Structure. HB 1405 directs the Special Committee to craft legislation based on the tax council’s report “without significant changes.” The report itself does not have the force of law. The report calls for a certification process for farmers to qualify for the sales tax exemption. To qualify as an agricultural producer, a person must own or lease real property from which at least $2,500 worth of farm products were produced and sold during the year. Provisions are included to allow qualification for producers who might not sell a crop every year, such as producers of orchard fruits and nuts or timber. A couple of items in the report are not aligned with Farm Bureau policy. Fruits, vegetables, Christmas trees and other products are often sold directly to consumers from the farm, and taxes are not collected on these sales. The tax council recommends elimination of this exemption based on the principle that sales taxes should be paid by the ultimate consumer rather than during the production process. Farm Bureau supports the current exemption. However, the savings to farmers resulting from the expanded exemption for inputs will, in most cases, offset additional costs associated with collecting taxes on direct sales. The tax council also calls for a 31-cent increase of state cigarette taxes from the current level of 37 cents per pack to 68 cents per pack based on an average of cigarette taxes assessed by bordering states. Farm Bureau opposes an increase in tobacco taxes.