Wednesday, February 11, 2009

Sneaky tax on food: Please write you legislator to VOTE NO ON SB5911

As if farming is not hard enough, now WA State legislators are trying to sneak the B&O tax onto farmers. This really is a tax on food, which is not taxed in Washington State.

The Capital Press published this story last week, Ag legislator sends out alert about proposed B&O tax. Kudos to Rep. Mark Schoesler, R- Ritzville, ranking Republican on the Senate Agriculture and Rural Development Committee and also a member of the Ways & Means Committee.

The B&O tax taxes Washington State businesses selling within Washington State on the GROSS income not the NET income. It is probably the one tax in Washington that hurts businesses the most. However, if you sell your product outside of the state, you do not pay it on that income, and if you import product into the state, you do not pay it on that income, either. This tax has the potential to cripple or even destroy the locally grown food movement in Washington State.

To read the bill and follow it, click SB5911 progress.

I urge you to steal this letter, which I cribbed from Jackie Aitchison the Manager of the Poulsbo Farmers Market and the director of the Washington State Farmers Market Association. It does not matter which part of the state you live in, please write. If you are outside of the state, go ahead and write too. Plaster the legislature with VOTE NO ON SB5911

HERE IS the letter I sent my state legislators. I sent it to Representatives and Senators alike, since what goes through one chamber tend to go through the other.

I am farmer in Kitsap Country and I ask you to VOTE NO on SB5911.

This bill is a direct tax on food and violates the spirit of the sales tax law that does not tax food.

This bill would be a major setback. It comes at a time when we are trying to nurture and support our local farming community. Our local farming community provides us with family wage jobs, healthy locally grown food, an alternative to the big box economy, and a beautiful rural landscape that can survive in an economically viable form.

This gross income tax ignores the fact that local Washington State farmers are in, at best, a breakeven situation, and may be losing money.

This bill would subject Washington farmers who gross over $200,000 to the state B&O tax. Since the tax is based on gross, rather than net, it completely disregards costs. For most small farmers, meaning most of our farmers here in Kitsap County, this is a regressive tax that puts them at a great disadvantage.

A $200,000 gross represents no personal income for many local farmers because expenses and risks inherent to the business are extremely high.

My husband and I are struggling to grow our small farm income to a level that we are not at risk to support it. We both work outside of the farm to support ourselves. We believe that we will be able to make the farming operation profitable; however this type of regressive taxation makes that task vastly more difficult. This tax allows companies that import food to our state that raised outside of our state, and even outside of our country. Because they will not pay this tax, those companies will be able to compete more effectively against us and sell their product for less than we are able to sell it.

If you are interested in finding out more about how farming in Kitsap County and other counties in our state contributes to our community or hearing the concerns of our farmers and our farmer's markets, I would be happy to arrange something.

Thank you,
Marilyn Holt, Owner
Abundantly Green
1146 NE Madison Road
Poulsbo, WA 98370

The trigger amount looks to be large number to kick in this tax, but it's not: $200,000 Gross receipts is still not enough when it cost more to product that much food, or if you are at break even, or even if you have a marginal profit -- 1% of $200,000 is $2,000 -- can you live on that a year?

Thank you for helping,

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