Panel wants to revive tax break for farmers

Colorado farmers and ranchers are buying bull semen, pesticides and other agriculture products from out-of-state companies because the Legislature last year temporarily did away with a sales tax exemption for such items, a state lawmaker said Monday.

That’s why Rep. Jerry Sonnenberg, R-Sterling, got the House Agriculture, Livestock and Natural Resources Committee to approve unanimously his measure to reverse that suspension.

“What we have done is place a new tax on our farming and ranching community, which now is the only business in the state of Colorado that I know of that charges sales tax for its inputs,” Sonnenberg said. “IBM doesn’t get charged sales tax when it puts a hard drive or motherboard in a computer until they get the final product. Agriculture, unfairly I might add, is being charged the sales tax on its inputs to put food on your table.”

To help the state balance the budget, the Legislature approved a three-year suspension of the exemption on agriculture compounds, which include insecticides, fungicides and growth-regulating chemicals. It was one of several suspensions lawmakers approved to help cover a $1 billion shortfall.

Other exemptions were on candy, soda and computer software.

Last week, a federal judge extended a preliminary injunction barring one of those measures from being implemented, which applied the state’s 2.9 percent tax on Internet sales by out-of-state companies.

Sonnenberg said eliminating the agriculture exemption has placed a particular hardship on farmers and ranchers.

“A dairy which might have four thousand to five thousand cows, and there’s a number of those (that) pay somewhere in the neighborhood of $24,000 a month in bull semen alone,” he said. “That’s not even their most expensive cost. The medicine to keep their cows healthy ... that can run somewhere between $300,000 to $400,000 a year.”

The measure heads to the House Finance Committee, where it will face close scrutiny because it would cost the state about $3.7 million in the next fiscal year, which begins July 1. That’s at a time when lawmakers are struggling with a $1 billion revenue shortfall.


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