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Tax Relief Would Help Agriculture
Regain Edge in Washington State

by Dan Newhouse & Joel Kretz, Guest Comment
Capital Press, March 2, 2007

Proposed bills would give farmers a better footing to compete in the global marketplace for food

Competition - in today's society just about everyone accepts it as a way of life.

Whether the field is academia, or sport, or business, competition plays an important role. The key to staying competitive is having the right tools. Unfortunately, that is what is missing in Washington's agriculture industry.

Agriculture has always played a critical role in the success of Washington's economy. It is the engine that has driven our economy since the state's inception. It is, in fact, the state's No. 1 employer. Unfortunately, many farmers struggle to stay afloat because of costly state taxes and fees.

The reality is farmers, ranchers and orchardists today compete in a very different marketplace than they did 20 or 30 years ago. No longer are Washington's agricultural products competing solely with neighboring states' commodities. Instead Washington products must compete in a global marketplace.

Now, more then ever, the Legislature and governor must create an environment in which Washington farmers are able to compete in a constantly evolving market by adopting measures that will reduce operating and capital costs so farmers can succeed in a new global economy.

Because we understand this reality we are supporting a package of agriculture tax reductions to help our industry regain a competitive edge.

Our tax relief plan would put money back in farmers' and ranchers' pockets so they can purchase new equipment or expand their operation. Money that isn't being put toward taxes could be used to support families and local communities.

House Bill 1587 would provide a reduced business and occupation, or B&O, tax rate for custom farming services. Like most industries, agricultural practices have evolved to accommodate ever-changing economic situations.

An excellent example of this is the expanding use of custom farming services. Custom farm equipment operators are better able to receive a fixed return on their investment while landowners benefit through the use of farming equipment without having to invest in a full line of machinery. This creates a win-win for both and should be encouraged through reduced B&O tax rates.

House Bill 1757 is another bill that would help ensure a more profitable bottomline for farmers and ranchers by exempting farm machinery and equipment from sales and use taxes. Washington is one in only a handful of states that charge sales and use tax for farm equipment. Our proximity to the Pacific Rim makes it more critical to create a business environment that will help our agricultural industry compete globally. HB 1757 would be an important step in the right direction toward accomplishing that goal.

The importance of maintaining agricultural land in Washington is also important to our industry's future. As farmers and ranchers, we know this is more than just how we make our living. We understand it is a way of life. It's something many families hope to pass along from generation to generation.

There are occasions, however, when urban growth forces farmers to sell a portion or all of their land. They are penalized for this and that's simply not right. House Bill 2270 would ease the financial burden on families forced to sell their land by eliminating the penalties and reducing the interest on taxes owed for converted land from open space.

Competition is a healthy part of business and can help ensure a top-quality product for consumers. However, it is vital to keep competition fair. The House Republican tax relief package would help ensure our state's agriculture industry has all the tools it needs to succeed in a global market. Frankly, help can't come too soon for many Washington farmers.

State Reps. Dan Newhouse R-Sunnyside, Wash and Joel Kretz, R- Wauconda, Wash., are on the House Agriculture and Natural Resources Committee.
Tax Relief Would Help Agriculture Regain Edge in Washington State
Capital Press, March 2, 2007

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