November 15, 2024
Business

Semen added to tax-exempt list, manure clarified State appropriations, agriculture panels agree to changes that will shift some burden to the public

AUGUSTA – Everyone walked away happy Monday from a joint meeting between the Legislature’s Appropriations Committee and the Agriculture Committee with the revamping of a list of tax exemptions that was able to protect farmers, barely affect consumers and increase state revenue.

“This was a unanimous committee report and provides consistency with the rest of New England,” Rep. John Piotti, D-Unity, Agriculture Committee co-chairman, said after the meeting.

All 12 items on the agricultural exemption list still will be exempt from sales tax for farmers. Bull semen, which virtually all of Maine’s dairy farmers use for artificial insemination, was added to the list, a move for which farmers had lobbied.

Four of the 12 items – feed, antibiotics, litter and medicine – will remain tax-exempt for everyone.

The biggest change would be that the remaining eight items on the list would become taxable to general consumers. These include fertilizer, pesticides, weed killers and insecticides.

“This would mean about 75 cents a year to a nonfarmer,” former Rep. Robert Tardy of Palmyra, an agriculture advocate and former Agriculture Committee chairman, said. “But it would generate $400,000 in revenue.”

That revenue could offset the loss of the semen tax, which is estimated at $75,000 a year.

“The law was really ambiguous, especially as it applies to agriculture,” Piotti said.

“What was saved was important,” Tardy said. “It meant the committee didn’t have to use a meat ax [on appropriations.]”

One of those programs on the cutting block in the Appropriations Committee was the innovative Maine Meat Act, which would have been lost. The act provides state inspection of slaughterhouses for in-state meat sales.

Piotti said that by making the revenue changes, funding was found for a nutrient management coordinator and an administrator for the Maine Farm Share Program, which benefits senior citizens, both within the Maine Department of Agriculture.

“We are very pleased with the final package,” Piotti said.

So was Andrew Watson of Etna. Watson is a horse breeder who had been denied a tax exemption on $570 in sales tax he had paid on a tractor to remove manure from his horse barn. Maine Revenue Services had decided that the removal of manure was not part of agriculture production.

While the new exemption list was being ironed out in the Appropriations Committee, a bill to clarify manure’s role in agriculture, LD 535, was unanimously voted “ought to pass” Monday by the Taxation Committee. The committee was aware of the meetings going on upstairs at the State House and knew that about $19,000 in tax revenue would be lost if manure removal equipment was made exempt.

But members also knew that the changes to the tax laws created new revenue that would offset that loss.

In commenting on the moves Monday that clarified the manure and semen tax issues for the farmers while increasing state revenue at the same time, Piotti said, “Some days are good days.”


Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like