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Governor promotes tax reform, port at annual GFB convention

POSTED: December 10, 2012 9:36 p.m.
Photo courtesy of Georgia Farm Bureau/

Gov. Nathan Deal addressed the 75th annual Georgia Farm Bureau convention on Jekyll Island and praised GFB members for pushing sales tax exemptions for farmers.

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JEKYLL ISLAND — More than 1,700 Georgia farmers and agribusiness leaders from across the state met on Jekyll Island from Dec. 2-4 for the organization’s 75th annual convention. The three-day convention included a trade show and commodity conferences where farmers heard updates on policy and production issues impacting Georgia’s major commodities.


During the Dec. 3 general session, convention attendees heard from Gov. Nathan Deal, Georgia Commissioner of Agriculture Gary Black and Brig. Gen. Joe Jarrard, commander of the Georgia Army National Guard.


Gov. Deal gave the GFB members an overview of tax reform legislation, House Bill 386, passed by the General Assembly earlier this year. In addition to eliminating sales taxes on energy used in manufacturing and the “birthday tax” Georgia residents have been paying when they renew their car tags each year by their birthday, the bill also expands existing sales tax exemptions on products used to produce farm commodities.


Deal acknowledged the role Georgia Farm Bureau played in securing expanded sales tax exemptions for farmers.


“Your Farm Bureau leadership was critical in making the importance of your case known to the General Assembly,” he said. “Without Farm Bureau’s voice being added, this particular part of the tax reform package probably would not have been included.”


Deal said the ag sales tax exemptions will be good for Georgia.


“If we can make your crops less expensive to produce, that will make you more competitive when you sell your commodities, and I think you will help us create jobs, and that, of course, is one of our main needs,” Deal said.


Deal also highlighted other bills beneficial to agriculture that the General Assembly passed this year and he signed into law. He noted legislation that increases the punishment for metal theft and makes metal buyers more accountable for verifying that metal they buy is not stolen.


“I know irrigation systems and poultry houses have been targets of metal theft, so hopefully this bill will lessen the incidence of these occurrences,” Deal said.


He also noted that the minimum acreage to qualify for the conservation use valuation assessment program that taxes farm and timber land on its current use rather than its fair market value was reset to 10 acres. Another provision was added to allow landowners who purchase land adjacent to property currently enrolled in a CUVA covenant to add the new purchase to the existing covenant, if the newly acquired land is less than 50 acres.


“I think this is important for us to be able to continue to preserve our productive agriculture land which helps us to remain a state where agriculture is the number one industry,” Deal said.


Deal commended agriculture for the contributions it makes to Georgia’s economy and the success of the Port of Savannah.


“Agriculture exports are a major part of the overall economy of our state and are one of the reasons our Port of Savannah remains one of the very few in the United States that has more exports than imports,” Deal said, noting that Georgia pecans have been discovered by the rest of the world and are now being shipped to China and India.


Deal said Georgia’s ag export markets are one of the reasons it is crucial that the Port of Savannah be deepened to accommodate the larger ships that will come through the expanded Panama Canal, which is expected to be completed in 2014 or 2015.


“If the ships can’t stop at our port, they will be forced to continue up the East Coast, and we will lose out on that business. We will lose out on the efficiency and the economy of reduced shipping costs, and as a result, our state will suffer,” Deal said.


While delivering his annual address to Georgia Farm Bureau members, GFB President Zippy Duvall urged Congress to take action during the lame duck session to prevent federal estate taxes from rising on Jan. 1, 2013.


Rising estate taxes pose a threat to the ability of Georgia farm families being able to pass their farms from one generation to the next because families may be forced to sell land, buildings or equipment to pay taxes due at the death of an owner.


“Federal estate taxes threaten our farms, and unless Congress acts soon, many farm families could be faced with some very difficult financial decisions if there is a death in their family,” Duvall said. “We urge a lower tax rate with increased exemptions indexed to inflation.”


The current federal estate tax exemption is $5 million per person with a top rate of 35 percent. Unless Congress acts before Jan. 1, the exemption will be reduced to $1 million per person and the top rate increases to 55 percent.


An analysis compiled by the American Farm Bureau using USDA National Agricultural Statistics Service data shows 664 Georgia farms would be subject to some level of federal estate tax at the current $5 million exemption. If the exemption level drops to $1 million, an estimated 7,469 Georgia farms would be affected.

        
Based on 2012 farm real estate values, USDA statistics show that farms larger than 286 acres would exceed the $1 million exemption level that goes into effect Jan. 1. It would take a farm of about 1,429 acres to reach the current $5 million exemption.

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