Victory on Two Ag Bills: Chicken Tax Withdrawn / Ag Sales Tax Died in Committee

Date: April 15, 2015

Related Content: Victories State Maryland

Tax Equity Bills (AKA Chicken Tax)- Withdrawn

Update: This bill received an unfavorable report from the House Environment and Transportation Committee and was withdrawn. Learn more from delmarvanow “Senate move clears way for phosphorus plan

NIFB is opposed to HB 886 and SB 533. This legislation creates a five cent tax on every
chicken grown in Maryland.  Although the bill requires the poultry companies
to not pass the cost onto the growers, there is very little to verify that from

According to the Maryland Farm Bureau these
two bills have the potential to drive the 700 farm families growing chickens in
Maryland out of business and harm the corn and soybean farmers who supply feed
ingredients to Maryland-grown chickens.

This legislation will also harm other
businesses in the rural parts of the state, and destroy the highly effective
farm cover crop program touted as a major contributor to Chesapeake Bay water
quality improvement. Under these two
bills, the funds created by the tax would be used in replacement of the funds
from the Bay Restoration Fund (AKA Flush Tax). Because the chicken tax
funds are being collected from the chicken growers, these funds will only be
available to grain farmers who use the poultry manure produced from these taxed
farmers. Therefore, the farms throughout the state that effectively
utilize Maryland’s cover crop program but don’t use poultry manure will not be
eligible for cover crop funding if these bills were to pass.

Ag Sales Tax Exemption- Died in Committee

NFIB opposed  HB 928 which would have repealed
the tax exemption that exists in current law for the purchase of inputs for
farm operations.  If passed, this bill would have required farmers to pay sales
tax on the purchase of:

  • livestock
  • feed or
    bedding for livestock
  • seed, fertilizer,
    fungicide, herbicide, insecticide
  • baler twine
    or wire
  • fuel for
    farm equipment and tractors
  • containers
    to transport products to market
  • farm
  • milking
  • all other
    farm equipment used to raise livestock, prepare, irrigate or tend the soil, or
    plant, service, harvest, store, clean, dry or transport seeds or crops

The bill
also applied the sales tax to services performed on the farm such as
fabrication, processing, or sawmill services for wood that remains on the farm.

The current exemption is in place
because farmers, like other businesses that build or manufacture a product for
consumer consumption, have always been exempt from taxation during the input
and production process.  Just like we would not expect an automobile
manufacturer to pay sales tax on every piece of metal, fastener or fabric used
to produce a car or on the assembly line parts to move those products, we
should not expect farmers to pay retail sales tax for the items they purchase
to grow food, fiber, and fuel.

Related Content: Victories | State | Maryland

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