2013-08-29 / Front Page

McCall warns farmers not to abuse GATE card exemptions

“People need to understand that if they abuse the GATE (Georgia Agriculture Tax Exemption) card – we will lose those exemptions on top of the ones we already had,” said Representative Tom McCall.

Implemented in January of 2013, the GATE program gives farmers a tax exemption on “pretty much anything” that is used in agriculture production.

“It’s one of the best things we’ve done for agriculture in the last 15 years,” noted McCall. “To qualify, an individual has to be a bona fide agriculture producer, with a minimum of $2,500 in sales.”

Prior to GATE, farmers did not have to pay sales tax on chemicals, livestock, fertilizer, machinery, and so forth. The new agriculture exemption card has expanded the list of non-taxable items.

The program represents a savings to agriculture producers of $17 million statewide.

“If farmers start claiming purchases that are not on the exempt list, it will start raising eyebrows at the Capitol, and the Georgia Department of Revenue (DOR) will start saying the program costs too much,” said McCall.

“Added to that is the fact that the majority of the legislature represents non-rural areas that don’t understand how important the GATE card is to production agriculture.”

Moreover, the DOR will be randomly conducting audits on stores which sell farming supplies. “The law could get appealed if it is abused. We don’t need to do anything to threaten the viability of the program,” McCall continued.

“How can I argue for GATE when someone buys a bird feeder or a Carhartt jacket and claims they will be used for production agriculture? When people abuse the program, it hurts the ability of legislators to convince other law makers of the need for the exemption.”

In closing, Representative McCall said: “Agriculture is the only business in the world where if there is an increase in the cost of input into the production process, the farmer cannot raise the price of his goods because the cost of everything he sells is based on the commodities market. The GATE card gives added value to input.”

Among the items that are tax exempt under GATE are: l Machinery and equipment used for qualified ag production, processing, and service operations. l Motor oil, oil filters, grease, lube, and hydraulic fluid for ag machinery and equipment. l Commercial lawnmowers, if used to maintain areas around chicken houses and other farm structures. l ATVs and off-road vehicles used for farm, ag processing, and ag service purposes. l Non-motorized trailers for transport of ag products, including livestock trailers. l Seeds, seedlings, and plants grown from seeds, cuttings, and liners. l Irrigation units and systems. l PVC pipe to be used above ground for irrigation. l All livestock and poultry feed used specifically for ag production or services. l Cattle, hogs, sheep, horses, poultry, goats, and bees when sold for breeding purposes. l Fencing for livestock and poultry facilities. l Products used for required ag operation cleaning. l Off-road (dyed) diesel for use on the farm. l Shipping or freight on items that qualify as tax exempt.

A partial listing of items that are not tax-exempt under the GATE program appears below: l Any motorized vehicles designed for on-road use. l Barns, greenhouses, strand metal buildings, and other buildings used on a farm or ag processing facility. These structures are considered real property. l Concrete pads. l Clothes, boots, and other apparel. l Administrative equipment and machinery. l Crushed rock and gravel for road/path construction. l Plants, fertilizer, pine straw, and other inputs used for aesthetic/ landscaping purposes. l PVC pipe used for below ground applications. l Animals that are not cattle, hogs, sheep, other livestock, poultry, or bees. l Gasoline or on-road (clear, nondyed) diesel, including aviation gasoline. l Energy used for administrative purposes.

For more information about the GATE program, contact the Georgia Department of Agriculture at 1-855- 327-6829 for visit the agency on line at farmtax@agr.georgia.gov.

Concerning questions about tax exempt items, call the Georgia Department of Revenue at 1-877- 423-6711.

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