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Georgia: Perdue suspends off-road diesel tax for farmers
Georgia farmers got welcome news Monday: The cost of fuel went down.
Gov. Sonny Perdue said farmers have been hit by a multiyear drought and face record fuel prices during peak planting season. So he suspended the state’s sales tax on off-road diesel.
“A lot of input costs for farming have drastically increased,” said Norman Edwards, University of Georgia Cooperative Extension agent for Walker County.
“A break in any of those input costs is going to help them out — whether they are mowing hay or doing whatever type operation that takes a tractor,” he said.
BY THE NUMBERS
* $3.70: Cost of off-road diesel fuel at LaFayette’s Rhodes Oil Co.
* 4 percent: Tax suspended by Gov. Perdue.
* $370: Cost of 100 gallons at $3.70 a gallon with state sales tax.
* 355: Cost of 100 gallons at $3.70 a gallon without state salestax.
FAST FACT
* If a farmer bought 100 gallons of off-road diesel fuel at $3.70 a gallon, with 4 percent sales tax eliminated, the farmer would save about $15 on the purchase.
ON THE WEB
For more information on Gov. Sonny Perdue’s executive order visit http://gov.georgia.gov.
Gov. Perdue signed an executive order Monday to suspend the 4 percent state sales tax, at least until the General Assembly convenes in January.
“We will take any kind of break we can get,” LaFayette, Ga., farmer James Burton said Monday.
Looking back at last month’s receipts from Rhodes Oil Co. in LaFayette, Mr. Burton said the fuel cost about $3.70 a gallon.
He said he has started the season’s first cutting of hay, but he has a lot more work to do. He added the tax break will be helpful — especially because he expects the off-road diesel to be about $3.90 a gallon the next time he buys.
Off-road diesel fuel is no different from regular diesel, except it does not carry a fuel excise tax.
The 7.5 cents-a-gallon excise tax is used primarily to fund upkeep of state’s highways.
So state officials can tell the off-road diesel from the highway fuel, the diesel is dyed red.
The sales tax adds up a lot quicker than the excise tax. At 4 percent, for each dollar that a gallon of fuel costs, the tax adds another 4 cents. At $4 a gallon, the sales tax would be 16 cents on one gallon.
Buddy Rhodes of Rhodes Oil said he thinks farmers will feel some relief from the governor’s order. He said he hopes so because business has been a little slower than usual.
“They are only buying what they need,” he said. “Normally they would fill up their tank.”
Mr. Burton said he has a 400-gallon storage tank on his farm, and how much fuel he buys sometimes depends on how much money he has.
Generally, he will buy about 300 gallons three times a year, he said.
This is not the first time Gov. Perdue has suspended a fuel sales tax to provide some relief for Georgians. In September 2003, in the aftermath of Hurricane Katrina, he called for a halt of state gasoline tax collections for about a month to help Georgians reeling after the cost of fuel jumped steeply.
That won’t happen this time, Gov. Perdue said, noting that the state cannot afford to suspend the tax for all motorists
The off-road diesel fuel tax suspension is effective immediately and will save farmers on the state sales tax, but the exemption will not affect local sales taxes. So farmers will still pay those taxes, which total 3 percent in Northwest Georgia counties, officials said.
Mr. Rhodes said the break may encourage some farmers who had decided not to plant this year to change their minds.
“I’m sure people will buy more,” he said.
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