Dean's World

A farmer in Maine put in for a tax ruling involving manure but it didn't turn out good in the end.

The state of Maine decided manure isn't part of agricultural production -- and now lawmakers are all upset and may pass a law that'll create some movement on this issue.

Details:

ETNA — Ask any elementary school pupil where manure comes from, and in all likelihood the correct answer will be provided: a farm.

The state of Maine, however, through a ruling of the Maine Revenue Services division, has determined that the removal of manure is not a part of commercial agricultural production.

What? Manure isn't agriculture?

That disbelief is exactly the reaction of the Maine Department of Agriculture, the Maine Farm Bureau, and Sen. Carol Weston, R-Waldo, who has submitted a bill to clarify the issue.

Actually, I always though manure production was part of political campaigns. But we digress:

The bill, LD 525, is set for a public hearing before the Taxation Committee at 1 p.m. Tuesday, Feb. 22. It clarifies the definition of commercial agriculture production to include the removal and storage of manure. Much like the archives of my blog The Moderate Voice here at Powerblogs. We go on: At the center of the controversy is Andrew Watson, who owns Top of the Hill Stables in Etna.

Watson breeds Standardbred racehorses on the farm, which has been in has family for five generations, and now has about 75 animals there.

Watson recently purchased a $11,400 Kubota off-road utility vehicle to clean out stalls, haul bedding and hay, and to pick rocks from fields.

"Basically, this is my wheelbarrow," Watson said this week. In fact, if he went to his local store and bought a wheelbarrow for his farm, he would be exempt from sales tax because it is used for agricultural production.

But when he applied for that exemption for his Kubota, Maine Revenue Services denied his request and appeal for a sales tax refund of $570.

"In this case, absent evidence showing that the equipment is equipped to literally `clean' the stalls, I conclude that your stated primary use of the equipment is to remove the used bedding and waste from the stall area after the stalls have been otherwise cleaned," wrote Jerome D. Gerard, acting executive director of MRS, in the final ruling issued in September."I find that the removal of waste following cleaning is incidental to the production of horses," Gerard ruled.

"It does not make any sense," Watson said. "I don't understand it, and nobody else does."

It actually makes sense from one standpoint: all across the country states and municipalities are looking for ways to increase revenues (code enforcement, fines) and increase existing tax collections. Like W.C. Fields on his deathbed, they're "looking for loopholes." We go on:

Watson said he doubted the ruling would have been the same had he been breeding cows and purchased a John Deere tractor, a better-known agricultural brand.

Watson said a nearly identical John Deere product was purchased by two different area farmers, and both were granted the tax refund.

Watson said the ruling is particularly confusing since he is required by the state to provide manure storage, a storage facility that was partially funded by federal agriculture agencies.

Danny Dorr of Dorr Equipment in Bangor sold Watson his Kubota.

"This is a tractor," he said this week. "It is ridiculous to put another burden on Maine's farmers."

Sen. John Nutting, D-Androscoggin, chairman of the Legislature's Agriculture Committee, is co-sponsor of the bill.

He said several other affected farmers have complained about similar situations.

"This is so totally absurd," Nutting said. "Here is the bureau of taxation, clearly not in tune with what agriculture is and applying taxes on agricultural operations that are not taxed in other states."

You-know-what happens.