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Colorado’s farmers, ranchers have earned their tax break

For generations Colorado’s farmers and ranchers have been an integral part of the state’s economy. Agriculture’s economic engine generates more than $40 billion annually and provides more than 170,000 jobs. In addition to food production, agriculture also provides employment opportunities in transportation, retail sales, food sales and restaurants, and agri-tourism.

As well as contributing to the state’s economy, agricultural producers take seriously their responsibility to protect the environment, through stewardship of the land, water and air. Additionally, land in farms and ranches provides habitat for wildlife and open space which creates an aesthetically appealing vista for all Coloradans to enjoy.

Like most of the 50 states in the U.S., Colorado has in place several tax exemptions and credits that encourage and incentivize agricultural production. One most familiar to agricultural producers is the exemption of sales taxes on purchases of equipment, insecticides, fungicides, pharmaceuticals and other livestock products.

In preparation for its Tax Expenditures Compilation Report, the Colorado State Auditor’s Office, which is mandated to “provide the state with factual evidence of whether the state’s tax expenditures achieve the objectives they are intended to achieve,” is reviewing tax expenditures, tax credits and deductions allowed for Colorado taxpayers under current law and will be providing policy recommendations.

The economic value that is derived from tax incentives that bring in large retailers, processing facilities and manufacturers to communities along the Front Range is significant. We argue that same value is found in rural Colorado when farmers and ranchers, the lifeblood of their small communities, receive the same considerations.

Colorado businesses of all sizes and origins, such as nonprofits, real estate developers, higher education partners and investors receive benefits from our state’s current laws to encourage and support a robust economic environment in which companies can be successful. Tax exemptions and credits for agriculture are just as important as those that incentivize large manufacturers, processors and retailers.

Unlike other businesses, the agriculturalist’s annual harvest is at the mercy of mother nature, the possibility of disease and volatile markets. The repeal of any of the ag tax exemptions or credits poses a real threat to the financial stability of agriculture families in our state.

From year to year, tax credits or exemptions provide some certainty to an industry — agriculture — that does not have to ability to set a price for their products. In most all cases whether you raise cows or bees or crops such as corn, hemp, fruits or vegetables, you are a “price taker and not a price maker.”

Our message is simple. Colorado State senators and representatives — maintaining the current state tax exemptions are vital to the future of the agriculture industry in Colorado.

As you prepare for the 2020 legislative session, we ask that you keep in mind the vital part that agriculture plays in our state. Also, the importance of providing the opportunity for new or young farmers to become part of Colorado agriculture as well as continuing an economic environment that will help sustain the next generation of agricultural producers in this great state!

Written on behalf of the members of the Colorado Livestock Association.

Originally published on in the Plain Talk About Rural Colorado segment.


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