Commission says loss of B&O tax exemption would cripple Washington spud industry

Farm and Ranch February 27, 2009 As the 2008 legislature searches for ways to fill a multi-billion dollar deficit in the state’s next biennial budget, one proposal that has been put forth is the elimination of the business and occupation, or B&O tax exemption, for agricultural producers. Chris Voigt, Executive Director of the Washington State Potato Commission, says that would be hard on potato producers. Voigt: “Well it is going to mean added costs to our growers with really no ability to pass that cost on. So that is going to come out of their bottom line. So we are very concerned about that.� The particularly onerous feature of a B&O tax is that it is on gross income, not net income. In other words, you pay the tax whether you are making money or not. Voigt: “That is what our concern is. If we look at the past history of all the money losing years we have experienced in the potato industry and then think of having to pay a tax when you are losing money, that just doesn‘t play well with our industry.� The Potato Commission also says potato farmers would be taxed at a higher rate than growers with less overhead. Higher value crops would pay inequitably higher taxes. Also, potato packers pay the B&O tax on fresh potatoes they pack for other growers. Charging those growers as well would amount to double taxation on the same produce. The bottom line; the Potato Commission says eliminating the B&O exemption would cost the state’s farmers and ranchers more than 30-million dollars a year and would cripple Washington’s potato industry, which has a value of nearly 3.5 billion dollars to the state’s economy. That’s the Northwest Farm and Ranch Report. Brought to you in part by the Washington State Potato Commission. Nutrition today! Good health tomorrow! I’m Bob Hoff on the Northwest Ag Information Network.