Senate Bill 6402 – Defining honey bee products and services as an agricultural product

washington_state_sealThe Senate Agriculture, Water & Rural Economic Development Committee held a public hearing January 30, 2014 at 10AM on defining honey bee products and services as an agricultural product.

This is an important issue as beekeeping is considered agriculture at the federal level but is not recognized in Washington State as being a direct agricultural activity or agricultural products.

http://apps.leg.wa.gov/billinfo/summary.aspx?year=2014&bill=6402

 

Dear Fellow Beekeepers,

DO THIS TODAY. It takes about 2 minutes to make a difference. Here is what you do:

How to contact your legislator representative:

Dear Fellow Beekeepers,

DO THIS TODAY. It takes about 2 minutes to make a difference. Here is what you do:

1. Go to http://app.leg.wa.gov/DistrictFinder/

2. On the map, click on your district. Then click on one of your legislators.

3. Then click on e-mail them.

4. Enter your address, etc. and it will send you to a page where you can

5. Tell them the bill of interest: SB 6402

6. That you support it

7. Want the note sent to all 3 legislators.

8. Paste in a copy of letter (below) or something similar.

9. Thank them for the work they do for us.

First,  thank you for all you do for us.
Please support Washington State Beekeepers by putting beekeepers on the same field as farmers. Help define honey bee products and services as agricultural products. Remember, beekeeping is agriculture. Help grow the Washington State beekeeping industry so we can compete on a level playing field. Pass SB 6402.
The pressure on honey bees and beekeeping operations will not disappear. Please support your honey bee industry.

Thank you.

The bill sponsored by Republican Sen. Jim Honeyford expands the definition of agricultural products for purposes of the state B&O tax to include honey bee products and pollination services.

This will exempt them from the tax under the general agricultural product exemption. The exemption is permanent and not subject to the 10-year expiration date or a tax preference performance statement.

The effective date of the legislation will be 90 days after the adjournment of the session in which it is passed.

The legislation was proposed because an exemption from state B&O tax that applies to wholesale sales of honey bee products expires on July 1, 2017.

The state Senate Agriculture, Water and Rural Economic Development Committee approved the bill and referred it to the Ways and Means Committee.

Supporters say exempting beekeepers from the tax will help them be competitive with those from out of state.

“As with any business, the B&O tax can be a crippling obstacle to overcome and easing that burden will allow the industry to expand, grow and create more jobs,” Honeyford says in a statement.

Washington is the only state to impose a business and occupations tax, which is levied on the gross receipts of all business activities. Unlike a corporate net income tax, there are no deductions for the costs of doing business.

“Small businesses often struggle in their first several years just to make a profit; many in Washington fail as a result of hitting the low B&O threshold but ending up in the red and losing money,” Honeyford says.

The amount of the tax depends on the category of business conducted. The general tax rate on manufacturers and wholesalers is 0.484%. The general rate on retailers is 0.471%. The tax is levied on the gross receipts of all business activities, except utility activities, conducted within the state.

No category of state B&O tax applies to any farmer selling agricultural products at wholesale or to any farmer who grows agricultural products owned by others, such as custom feed operations. A farmer is defined as a person producing agricultural products for sale.

“Just as the state considers milk that comes from cows to be an agricultural product, so should it consider products derived from honey bees,” says Honeyford, who serves as ranking Republican on the committee

Committee notes with the bill say that 100 taxpayers will be affected by the legislation. The notes say that in 2009, beekeepers reported about $1.6 million in wholesale sales. The committee estimates the state government will lose about $7,000 a year from taxes on pollination services and $6,000 a year on tax revenue from the sale of honey bee products.

Washington State Beekeepers Association president Mark Emerich testified in favor of the change before the committee saying honey bees are an integral part of agriculture. He later told reporters he didn’t know of any other state where beekeeping wasn’t defined as being in agriculture.

Beekeepers say the tax also puts bee pollination services at a disadvantage because more than half of the state’s pollination is carried out by out-of-state bee businesses and as only a handful register to pay the B&O tax and the state government did not know they were there.

Comments

  1. As beekeepers, WHY should we support senate bill 6402? How would it actually benefit us or the bees? If beekeeping were to be listed as agriculture what advantages would that provide?

    • Good question. This will benefit all commercial beekeepers as currently they are subject to state B&O taxes. This puts them at a competitive disadvantage to out of state beekeepers who supply the same agricultural products and services. Since out of state beekeepers are not subject to this tax, SB 6402 helps level the playing field.
      Paul

  2. The B&O tax currently applies to pollination services. It also applies to sales of goods produced by bees: “queen honey bees, packaged honey bees, honey, pollen, bees wax, propolis, or other substances obtained from honey bees.” That’s the language from the bill specifically exempting those products of bees from the tax. If you sell any of those or provide pollination services, you should pay it.
    The tax rate is 1.5%. It’s not an onerous tax, but it is unfair because the rest of agriculture does not pay B&O tax on its products. Beekeepers register with the Dept of Agriculture and are regulated by them but aren’t considered agriculture for tax purposes, which doesn’t make sense. Also, more than half the pollination services in the state are done by bees owned by out of state beekeepers. Today only 4 out of state beekeepers have registered with the state Dept of Agriculture, compared to the hundreds of in state beekeepers. It’s reasonable to assume that those 4 are the only out of staters to pay B&O tax. After discussing this with the Dept of Revenue, they tell me that the state has no way to collect those taxes. It’s not fair that we have to pay it when the out of state beekeepers, who are liable to pay according to the Dept of Revenue, can get away with not paying.
    This bill doesn’t benefit bees directly, it benefits beekeepers who then can take the savings and better take care of their bees.

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