Tentative Budget Deal Would Restore Agriculture Tax Exemptions

Tentative Budget Deal Would Restore Agriculture Tax Exemptions

Fort Collins, Colo., April 5, 2011 – The Colorado Legislature today announced a tentative agreement to balance the state’s budget for fiscal year 2011-12.  The Colorado Senate and House of Representatives have been gridlocked for weeks, negotiating specific aspects of the budget.  Among the provisions in the tentative agreement is the re-instatement of the tax exemption on agricultural compounds (i.e. herbicides, vaccines, etc.).

“The reinstatement of this tax exemption is very important to rural Colorado.  The health of the agricultural sector is important to rural communities and the state as a whole,” said Chris Tallman, Brandon, President of the Colorado Association of Wheat Growers.

Last year the legislature suspended the tax exemption on agricultural compounds for three years as part of a budget balancing package opponents dubbed the “dirty dozen.”  The legislature expected to generate approximately $3.7 million annually by removing the exemption.  However, the Rocky Mountain Agribusiness Association, in testimony before the House Finance Committee earlier this session, suggested evidence of what would have been sales to Colorado businesses going to neighboring states.

“These products are vital inputs to our farming and ranching operations.  In no other sector does the State of Colorado tax raw inputs.”  Tallman continued.  “While we can debate the impact restoring this exemption will have in helping balance the state’s budget, the true impact is seen locally as small businesses lose sales and revenue to surrounding states that don’t tax these types of products.”

It is expected the Senate will take up the budget immediately.  Final passage, however, won’t happen until the middle of next week at the earliest.

“CAWG will be closely monitoring the ongoing budget negotiations and continuing to fight on behalf of Colorado’s wheat producers,” Tallman said.

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