Commission considering sales tax exemptions
Ag, machine, pesticide, beetle kill products part of the discussion
December 13, 2012
“Farmers are as price conscious as any group of people I know. Being so close to Utah and Wyoming it provides incentive for local farmers and ranchers to make large purchases out of the area.”
— Brent Brighton, Rocky Mountain Machinery, about being in favor of Moffat County approving certain sales tax exemptions.
The Moffat County Commission on Tuesday hosted a discussion about a proposed resolution that could make certain products exempt from county sales taxes.
The sales tax rate in Moffat County is 2 percent and Colorado's state sales tax rate is 2.9 percent.
But over the years the state legislature has exempted 11 categories of products from state sales tax, and also has permitted local governing bodies to exempt those same products from local sales taxes without the need for an election.
Those products include food for home consumption, machinery and machine tools, gas and electricity for residential use, occasional sales by charitable organizations, farm equipment, pesticides, food sold through vending machines, low-emitting vehicles over 10,000 pounds, renewable energy components, beetle-kill wood products, and school-related sales.
How counties have addressed sales tax exemptions is varied, Commissioner Tom Gray said, and runs the gamut from Mesa County that has approved all 11 tax exemptions to Moffat County, which currently has no sales tax exemptions.
The commission already has received requests for sales tax exemptions for agricultural products, pesticides, machinery and beetle-kill wood products, but wanted to host a forum to discuss if any other exemptions should be considered and why.
Brent Brighton, of Rocky Mountain Machinery, was one of the people who requested the agricultural sales tax exemption, which would apply to products over $1,000.
Brighton cited Craig's close proximity to both the Utah and Wyoming borders, two states that have more farmer-friendly sales tax rules, in his request.
"Farmers are as price conscious as any group of people I know," Brighton said. "Being so close to Utah and Wyoming it provides incentive for local farmers and ranchers to make large purchases out of the area.
"Two percent on a $100,000 tractor is $2,000 and it doesn't cost $2,000 in fuel to travel that far."
Betsy Nauman-Cook, director of the Craig/Moffat Economic Development Partnership, also attended Tuesday's meeting and urged the commission to consider all 11 tax exemptions to give Craig and Moffat County another tool to boost economic development.
"I think overall it's a win/win for us because we are so small there's not a whole lot we can offer (prospective new businesses)," Nauman-Cook said. "We can't offer a lot of incentives, we don't have buckets of money, so any little thing like this we can do to help people grow their business in Moffat County I think we should do."
The commission was in agreement, but decided to table official action until it could investigate further what tax exemptions might do to the county's sales tax revenue, a large portion of which funds public services.
But sales tax information is proprietary to a lot of Moffat County's small businesses, Curtis said, which would make it difficult to determine what the potential sales tax revenue hit might be across all industries.
On Thursday Curtis was in the preliminary stages of trying to determine what the sales tax revenue loss could be, but even among what the commissioners thought would be two fairly straightforward categories to research — food for home consumption and residential utilities — Curtis said those sales tax numbers are hard to determine because a grocery store sells more products than just food, for example.
According to her preliminary numbers, the county collected a total of $2,270,390 in sales tax revenue from January through October of this year.
Grocery stores account for $346,930, or 15 percent, of total sales tax revenue so far in 2012. Utilities account for $166,601, or 7 percent, of the county's sales tax volume.
Taken together, taxes from food for home consumption and residential utilities make up more than 22 percent of the county's annual tax revenue.
Curtis expects the commission to take those numbers into consideration Tuesday before making a final decision on which products will be exempted from county sales tax.
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