Springfield, Ill.-Farm input businessmen would be hit particularly hard by Gov. Rod Blagojevich’s plan for a gross receipts tax, according to the Illinois Fertilizer and Chemical Assn. (IFCA). The ½ percent levy on gross sales and 1.8 percent on service for the manufacture, wholesale, and retail market was unveiled earlier this month in his FY2008 budget message as a “Tax Fairness Plan which closes corporate loopholes and gives the middle class the relief it deserves.” IFCA Pres. Jean Payne responded, “We are an industry of high volume and low margins. In order for input dealers to recoup, the farmer would have to see price increases of 15 to 25 percent. In the real world, however, it will be extremely difficult to pass along this tax and impossible for wholesalers and dealers located near the border of the five states that surround Illinois.” Payne pointed out that competitors in neighboring states would not be subject to the gross receipts tax and would have a price edge on Illinois agribusinesses on fertilizer, chemicals, seed, fuel, grain, and the rest. “In 2004 our industry was successful in defeating a proposed 6.25 percent sales tax on all ag inputs,” she recalled. “This new one would be more than double any sales tax and would be devastating to Illinois agriculture.” The governor’s tax plans are expected to be debated in the legislature through May, and IFCA “will be working with our supporters to defeat this proposal in its entirety.”
Transparency Across the Fertilizer Value-Chain