Sonnenberg-sponsored fertilizer tax bill moves forward

    A bill to yank back a state sales and use tax on fertilizer won near-unanimous approval last week from the House Finance Committee.
    House Bill 1329 is sponsored by Democratic Rep. Jeni Arndt of Fort Collins, Republican Rep. Hugh McKean of Loveland and Republican Sen. Jerry Sonnenberg of Sterling.
    The bill moves fertilizer into the category of wholesale sales — which are not subject to sales and use taxes — that cover agricultural and livestock production. It also covers spray applications that increase the effectiveness of a pesticide.
    The exemption does not apply to specialty fertilizers, which under state law include those applied in nonfarm uses. That’s for fertilizers applied to home gardens, lawns, golf courses and cemeteries, for example.
    The Department of Revenue changed the rules for taxing fertilizer about five years ago.
    After the department decided fertilizer should be taxed, according to Sonnenberg and other lawmakers, people began receiving notices that they not only had to start paying the tax on fertilizer but had to pay the back taxes for fertilizer purchased in the last three years.
    House Bill 1329 covers all of that, Arndt told this reporter. It not only cancels the tax going forward but cancels it retroactively to when the department made the rules change.
    The bill carries a fiscal cost of about $725,000, but Arndt said that’s revenue the state wouldn’t collect rather than lost revenue. To date, only one company has come forward to raise the issue, but more will surface, according to supporters.

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