Tennessee gets certification requirement in 2008

Nashville, Tenn.-Starting Jan. 1, getting the sales tax exemption on fertilizer and other farm inputs in Tennessee will require certification by the state revenue department. That’s fine with agriculture interests, but in some cases the word hasn’t been spread to those who will need the certificate. “We’re very nervous about that,” Tennessee Farm Bureau spokeswoman Redone Rose told Green Markets. Rose said an informal survey of the 350 delegates at the Farm Bureau’s recent annual meeting found that 20-25 percent had not received applications sent out by the state. Some were among the state’s largest farmers. She said the department pre-identified about three quarters of those known to qualify for the certificate, but others need to get on the website or get an application from their farm store and send it in, because dealers will be required to see the certificate and keep a copy on file. The “Agricultural Sales and Use Tax Certificate of Exemption Program” is part of a streamlined sales tax system that’s been in the work for five years by Tennessee and 42 other states, plus the District of Columbia and local governments. Business is interested in more simplified and uniform laws for easier compliance in all states. But one state legislator, Rep. Phillip Pinion, warned that hobby farmers, individuals who raise horses, and others may be upset when they might have to start paying as much as 9 3/4 percent in state and local sales taxes on their farm store purchases. They may not qualify for the exemption. “I think we’re going to hear a whole lot more about it,” Pinion added. Sales tax exemptions are also on the minds of farmers in Arkansas, where Gov. Mike Beebe has indicated he may eliminate the remaining 3-cent levy on groceries in 2008. He won’t know for sure until his advisers produce their economic forecast. Beebe, however, told Arkansas Farm Bureau members at their recent state convention not to worry about eliminating the exemption on farm inputs. He thanked them for supporting him on halving the 6-cent grocery tax, and promised that any future plans would not affect tax exemptions on farming products such as seed and fertilizer.