Springfield , IL – As the Governor looks to dramatically increase the size of government spending, new revenue sources are being sought to pay for it and Illinois farmers and agricultural businesses are again being threatened with a massive tax increase. State Sen. Dan Rutherford (R-Pontiac) says that Illinois’ agriculture community could take a major hit if a budget proposal to place a tax on feed, seed and fertilizer is approved by the General Assembly.
“This is yet another example of the Blagojevich Administration threatening the agriculture community in Illinois,” said
Rutherford. “It appears we were successful in our efforts to defeat the Governor’s Gross Receipts Tax this year. However, this latest proposal again cuts to the basics of the Illinois economy—agriculture.”
Under the plan, the state’s sales tax exemption on farm inputs, including feed, seed and fertilizer, would be repealed for farmers with a gross income over a certain amount. This move is expected to create $27 million in new revenue for the state.
“If the new tax is approved, the state will be taxing what the farmers use to produce their crop,” said Rutherford. “This places our agriculture community at a great disadvantage because they are at the mercy of the market and cannot set a price to reflect the increased costs of production.”
Rutherford explained that the “Ag Tax” is identical to a proposal from 2004, in which Gov. Blagojevich waged a “War on Agriculture” by proposing massive tax increases on Illinois farmers coupled with major funding cuts to the Illinois Department of Agriculture.
“This proposal wasn’t good for Illinois or our farmers in 2004, and it isn’t any better in 2007,” the Senator highlighted. “The effects from this tax will be felt in all corners of the state. Jobs in related industries such as restaurants, trucking, and manufacturing could all be at touched.”