Thursday, November 15, 2012

Agriculture Tax Exemption Signup Begins Today

By Dallas Duncan, Georgia Cattlemen's Association director of communications

From left, Georgia Farm Bureau President Zippy Duvall,
Georgia Cattlemen's Association Legislative Committee
Chairman Chris Taylor and GCA Executive Vice President
Josh White display their completed GATE certificates

MACON -- Today is the first day Georgia farmers can apply for the Georgia Agriculture Tax Exemption certificates, state agricultural leaders announced at a press conference on Nov. 14.
"House Bill 386 is a comprehensive state tax reform bill. There's a lot more to it than just GATE, but it's one of the best things that we have ever, ever had the legislature do for agriculture," says Rep. Tom McCall, chairman of the state House Agriculture and Consumer Affairs committee. "You can't look up in the sky and dream of any input into production agriculture that's not going to be tax-exempt after Jan. 1 if you have a card."
GATE has been long-awaited in the agricultural community. After several years of "hodge-podge" and "patchwork" agricultural tax exemptions, Georgia's legislature finally passed consolidated exemption laws for all producers earlier this year. The exemptions go into effect Jan. 1, 2013, but only producers who have valid GATE certificates are eligible.
"So, come Jan. 1, if you haven't got a card, you buy a new tractor, you're going to pay sales tax on it. You buy one sack of fertilizer, you're going to pay sales tax on it if you don't have a card," McCall says.
According to the GATE program, products included in the exemption are defined as any agricultural, apicultural, horticultural, silvicultural, viticultural or vegetable product that has been produced or processed in Georgia.
Georgia Commissioner of Agriculture Gary Black,
House Agriculture Committee Chairman Tom McCall and
Farm Bureau President Zippy Duvall announced the
GATE applications go live today during a Nov. 14 press conference
Georgia producers qualify for GATE if they own or lease land or property from which at least $2,500 in agricultural products are produced and sold annually; if they provide custom agricultural services for hire; if they own land qualified for conservation use property or if they produce long-term agricultural products that don't necessarily have an annual income, such as timber.
Those in the furniture and sawmill businesses do not qualify for the GATE program, and for the most part neither do producers with farms in other states. However, other state residents with farms in Georgia do qualify for GATE, as do residents with farms in both Georgia and another state. There are also refund forms available on the Department of Revenue website for those with GATE certificates who feel they paid sales tax for an item that should not have been taxed -- such as fuel for tractors, for example.
The Department of Agriculture will send out renewal notices at the end of 2013 and subsequent years to remind producers to renew their GATE certificates.

Georgia Commissioner of Agriculture Gary Black signs up
for his GATE certificate
Georgia Commissioner of Agriculture Gary Black says the process to sign up for a certificate is quick and easy, collecting just enough basic data to help the department keep records for auditing purposes. To prove it to those at the press conference, Black, McCall and Georgia Farm Bureau President Zippy Duvall sat down at computers, and five minutes later Black was printing out his GATE certificate.
Up to four copies of the wallet-card sized certificate can be printed, allowing a primary cardholder and three additional users to have one.
It does cost $20 to apply for the certificate online and $25 to do so over the phone. The fee is by law required to go toward the cost of administering the program. For those worried about spending the fee, McCall says they'll see the return on investment after paying about $300 for farm supplies and not having to pay sales tax on it. He says the money farmers save through GATE will get turned around and spent right back into the economy.
Duvall says the GATE program will help make Georgia more competitive, as it applies not only to production agriculture but to agricultural industries as well. 

"[GATE] makes our state a more industry-friendly state and will bring more jobs here to secure the future of Georgia's No. 1 industry," he says.
Some states that border Georgia do offer agricultural tax exemptions, and leaders feared that producers would be willing to drive over the state line to purchase equipment and other farming inputs -- leaving Georgia businesses out in the cold.
"With these tax exemptions ... it's going to balance out," McCall says. "It's going to help keep our equipment and keep them in our area. I can't tell you how good this thing is for us in agriculture."

To apply for the GATE certificate:

  • Visit the official website and apply online
  • Download and mail in a print application from the Georgia Cattlemen's Association website
  • For questions or concerns, call your local Farm Bureau office or 1-855-FARM-TAX between the hours of 8 a.m. and 4:30 p.m. Monday through Friday.

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