February 04, 2005

Crapo Bill To Aid Potato Growers

Aims to eliminate tax on truck-beds used to transport potatoes

Washington, DC â?? Idaho Senator Mike Crapo introduced a bill this week to correct an expensive federal excise tax that has been incorrectly applied to Idahoâ??s potato industry. Under present law, potato farmers have faced an inconsistent and confusing history with regard to the enforcement of the excise tax. The bill, S. 2807, would exempt truck-mounted bulk beds from the excise tax currently levied on heavy trucks and trailers. Such beds are used primarily in potato farming to move agricultural products from field to storage. The measure is co-sponsored by Senator Russ Feingold (D-Wisconsin). â??Taxing truck-mounted bulk potato beds is misguided and hurtful to the economy,â?? said Crapo, a member of the Senate Agriculture Committee. â??There is a significant difference between these trucks and other trucks and trailers subject to the excise tax. Truck-mounted beds are only used for transporting farm produce a short distanceâ??from field to storageâ??as opposed to multi-use vehicles participating in interstate commerce. In addition, no excise tax is charged on used beds, a fact which may promote the importation of non-domestic beds used for one season that qualify as used equipment. In Idaho alone, a drop of 40 percent in sales of beds has been reported as a result of the tax. The revenue produced by this tax is more than offset by the reduced economic activity caused by the tax. The decision to place a burdensome excise tax on what is clearly a farm implement benefits no one.â?? In past rulings, the IRS has interpreted the bulk beds to be exempt from the tax. However, the IRS recently reversed course, ruling that the bulk beds are taxable. Crapo has introduced the legislation to bring certainty to the tax code. To date, a bipartisan group of seven Senators have signed on as co-sponsors of the bill. It has been referred to the Senate Finance Committee for consideration. # # #