Springfield, Ill.-Several hundred people, representing more than 60 farm organizations, descended on the state legislature late last month to protest Gov. Rod Blagojevich’s gross receipts tax plan to assess manufacturers, wholesalers, and retailers a half percent across the board, which they claim will devastate the state’s agriculture industry. The protesters took advantage of the occasion of the 37th Illinois Agricultural Legislative Day to draw the battle lines over the governor’s budget, which would increase business taxes by $6 billion to expand health care and pump more money into schools. Illinois Farm Bureau President Phil Nelson labeled the governor’s GRT “a pyramid tax” in which “every person who touches a product will pay some sort of tax.” According to Nelson, consumers will bear the brunt along with farmers, because they are price takers and can’t pass along the extra costs. Illinois Fertilizer and Chemical Association President Jean Payne declared that ag retailers will be hit particularly hard since they have high sales volume and low net margins. “Each level of distribution pays the tax,” Payne warned. “In agriculture, a half percent will be added by the manufacturer, another half-percent by the distributor and still another by the ag retailer before it even gets to the farmer. For example, anhydrous ammonia will be taxed three times and increased by at least $7.09 per ton, or 79 cents per acre.” She calculates that the total cost of ag inputs for farmers will be $3.31 for each acre of corn and $1.69 for each acre of beans. Pike County Farm Bureau Manager Blake Roderick said a GRT tax could drive local farmers in his area across the state line to Missouri to buy fertilizer, chemicals, and seed. At the same time, agriculture gained an ally in Lt. Gov. Pat Quinn, who declared he doesn’t agree with the governor’s proposed GRT tax because “there are other ways to invest in education and health care.”
Transparency Across the Fertilizer Value-Chain