Monday, February 8, 2010

Taxing Farmers and Ranchers

Among the myriad of tax increases proposed by the Democrats this year is a bill to add sales tax to pesticide purchases and medicine purchases for livestock.

When this bill passes, and it will pass, Colorado will be one of only six states to charge farmers and ranchers sales tax for the inputs they use to produce food.

What’s interesting is that the law will create an incentive to purchase your pesticides and medicine online or from an out of state retailer. Yes, I know that Colorado residents are supposed to pay use tax in place of the sales tax when they do that, but the reality is that most people won’t. At least they won’t until they think the chance of being audited is high. Trust me; I know these guys and they don’t like paying taxes.

Taxes on production inputs do not exist in any other industry in Colorado, but now agriculture will face that type of tax. And ag is an industry that can’t pass costs on; we compete in a world market and are price takers. We accept the price offered by the buyer, and when competing farms located in Kansas and Nebraska don’t have the same costs it makes Colorado farmers less competitive and gives them an incentive to not pay these taxes.

So what does this new tax mean in human terms? Well, if you are a full time farmer this bill will likely take $2000 to $6000 out of your pocket.

That’s a lot of money.


  1. That would tick me off so much I'd drive to the next state and get what I needed there...

  2. But since it is a sales and USE tax you would still technically owe the tax.

  3. Senator Brophy fought the good fight against this unconstitutional and punitive tax increase (as he did against the entire "Dirty Dozen" package) - but he shouldn't have had to fight this in the first place.
    The sponsors of these bills are exploiting an apparent loophole created by the Colorado Supreme Court in last year's "Mill Levy Tax Freeze" ruling (that's right, it didn't just raise your property taxes...)

    Support your local legislator - but remember who did this to you: the unjust justices of the Colorado Supreme Court. Vote "NO" on retaining them in office this November...