Wednesday, April 20, 2011

Agricultural tax exemption back on track

Lawmakers unanimously agreed Tuesday to restore an agricultural tax exemption that was suspended last year.

House Bill 1005, sponsored by Sen. Greg Brophy, R-Wray, in the Senate and introduced by Rep. Jerry Sonnenberg, R-Sterling, repeals the provisions of last year’s House Bill 10-1195, which suspended tax exemptions on products used in agricultural goods such as pharmaceuticals for animals, pesticides and bull semen.

Brophy told the Senate Finance Committee hearing the bill that the agricultural community responded to last year’s discontinuation of the exemption by buying what they needed across state lines, where the items are not taxed.

“These folks are simply doing what they have to keep their farms and ranches afloat,” said Brophy. “When they buy out of state, they are hurtng Colorado businesses.”

Sen. Michael Johnston, D-Denver said he welcomed the chance to restore the exemption. Recalling his visits to farms and ranches last summer, Johnston said he repeatedly heard from farmers and ranchers that the tax was burdensome to their bottom lines.

“I’m glad to have the opportunity to reinstate this for them,” said Johnston.

However, the unanimity in the bill’s passage is due, in part, to a negotiated agreement made between Democratic and Republican lawmakers over the 2011 budget.

Critics of the agreement say that the cost of restoring the exemption is too high.

“Every dollar counts when we’re balancing the budget, and now is not the time to reduce revenue,” said Ali Mickelson, a tax policy analyst with the Colorado Fiscal Policy Institute.

Yet, Sen. Lucia Guzman, D-Denver, said that she wouldn’t have voted for taking away the exemption in the first place even though her party supported the suspension last year.

Via – Colorado News Agency

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