Sticky tax irks maple syrup producer

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SKOWHEGAN – Jeremy Steeves is upset with the IRS, but it isn’t over tax forms. Instead, something stickier has come up.

Steeves, a maple syrup producer and officer with the Maine Maple Syrup Producers Association, recently said that the IRS informed Maine oil dealers earlier this year that they should collect a 24-cent tax per gallon on fuel delivered to maple syrup and turpentine producers.

“I feel that it’s unfair. I feel that we are being singled out,” Steeves said.

“This is the first time that they want to charge northern Maine producers. They’re skipping Vermont, New York, and other maple syrup producing areas. Perhaps, we made a big juicy target,” he added.

Calls to the IRS for comment were not returned.

Steeves shared his concerns with Sen. Susan Collins, which provoked a letter from her sent to IRS Commissioner Mark W. Everson. It was an attempt to learn what was behind the government agency’s recent decision.

“I am concerned that this additional tax on the industry will adversely affect maple syrup harvesters in Maine,” Collins stated in the letter.

According to a press release from the IRS, the tax is equivalent to the federal road fuel tax for diesel fuel.

“However, maple syrup producers feel they should qualify for an agricultural exemption, because the fuel is critical to the production process,” Collins stated.

Syrup producers rely on fuel for condensing sap into syrup, for generators, and for off-road uses.

“All of these uses,” Collins wrote, “are part of the maple production process, which is agricultural in nature.”

“There’s been a movement in the government to classify us as manufacturing,” which, Steeves said syrup producers are not.

Steeves said he got wind of it when a Maine oil dealer was audited by the IRS, who learned that the tax wasn’t being applied to oil bought by maple syrup producers.

“C.N. Brown and Irving were not aware of such a tax, but, as soon as they are, they’ll start collecting. I’m not sure what precipitated this, but I’d like to get it taken care of,” Steeves said.

Like Collins, he believes it would put some syrup producers out of business.

“Some of the smaller producers would be more affected, because it takes them more oil to produce more syrup,” Steeves said.

It would amount to a dollar a gallon or more with additional taxes figured in, “on top of the already high oil prices. It would hurt,” he added.

He believes it would affect more than 80 syrup producers in Maine.

“We’re looking for a clarification, and, hopefully, a reversal, so we’re not under this cloud,” Steeves added.

Collins spokesman Kevin Kelley stated in e-mail responses to questions that the senator has yet to receive a response from the IRS.

“The IRS has not been very open to talking,” Kelley stated Tuesday.

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