Sales and Income Tax Subcommittee
Blatt Building, Room 101
April 17, 2012
Thank you for the opportunity to speak today. I am Jack Shuler, president of Palmetto Agribusiness Council. Our organization represents some of the largest agribusiness employers in South Carolina. Our mission is to sustain the economic viability of the state’s largest business cluster. Agribusiness (which includes agriculture and forestry) contributes $34 billion to South Carolina’s economy and provides 200,000 jobs to its citizens.
I want to address our concerns with the proposed legislation H.4995 that would remove sales tax exemptions on certain agricultural products. It is important to know that these exemptions do more than just provide a tax break for our farmers and foresters, but often contribute to the difference between profitability and loss. We also need to be very cautious that we don’t encourage unintended consequences that encourage a pyramiding tax structure that may lay the groundwork for a value added tax system.
Until recently our industry has been overlooked for its potential in driving our economy in relation to job creation and investment. At a time when we are just beginning to develop specific agribusiness economic development strategies in partnership with the SC Department of Agriculture, the SC Forestry Commission and the SC Department of Commerce, it is crucial that we provide opportunities, not obstacles for our industry. For example, the SC Department of Agriculture has a plan to increase our economic impact to $50 billion by the year 2020, and the SC Forestry Commission has developed a plan to increase their economic impact to $20 billion by 2015. These plans have the potential of creating 90,000 new jobs for South Carolinians. In fact, agribusiness has been identified by New Carolina’s statewide cluster initiative as key to rural economic development. If we can sustain and grow our agribusinesses by capturing more of the value of agricultural products, we can increase jobs in rural distressed counties, add to the tax base and aid in raising per capita income.
Agribusiness provides the necessities of life- food, clothing and shelter. It is tied to the groceries in your pantry, the clothes in your closet and the houses you live in. No where in the world is there a more affordable, abundant and safe food supply than here in our nation. Increasing the tax burden on our farmers puts us at risk of driving our food production offshore, making us dependent on foreign sources for our most basic need just like we are for our oil supply.
We realize that in these economic times, our legislators are looking for budgetary solutions. However, we need to look at ways to increase revenue and not stifle growth. We want to make sure that we do not defeat our purpose by passing legislation that has a negative impact on agribusiness and our state’s economy.