This update covers two topics: a proposed rule for cattle ID at the state level, and new requirements for agricultural sales tax exemptions.
The Texas Animal Health Commission has proposed a rule to impose new identification requirements on livestock markets. The proposed rule would require markets to identify each head of cattle that are:
- 18 months or older;
- “dairy cattle” – “all cattle breed typically used to produce milk or other dairy products for human consumption”; and
- all cattle and bison “used for rodeos, recreational events, shows, or exhibitions”
The agency does not provide any analysis as to how the benefits of this new requirement outweigh the costs. The agency makes the assumption that tags will be available from USDA “at no extra charge.” Given the severe budget cuts that USDA faces, however, that is a dangerous assumption to make. Moreover, the cost of the tag is only a small part of the true impact of identification requirements. Tagging cattle requires equipment and labor, and always poses the risk of injury to both the workers and the animals. In addition, the tagging process is often stressful for the animals and can cause weight loss and bruising that lowers the value of the animals.
The language of the rule is both overbroad and vague. How is a sale barn manager supposed to know if a specific animal is being used in a rodeo or show? Are dual-purpose breeds considered “dairy cattle”? The proposed regulation places sale barn owners in an untenable position where they must either err on the side of tagging many extra animals (with all the attendant costs) or risk breaking the law.
The stated justification for the proposed rule is to replace the traceability that has been lost with the ending of the brucellosis program. Under that program, sexually intact cattle over the age of 18 months had to be tested by the owner or at the livestock market and then identified. But when the State ran out of money to pay for the disease testing, the program was stopped. The agency has not shown how the costs of mandatory identification are justified in the absence of disease testing, nor has the agency explained why the proposed rule requires tagging of animals that were not part of the brucellosis program (i.e. dairy and exhibition cattle).
Ultimately, this proposed rule means more costs for sale barns, which will undoubtedly be passed on to animal owners.
Please submit comments to the Texas Animal Health Commission on the proposed rule before December 6, 2011.
Below are sample comments. Please take a few minutes to personalize at least the first couple of sentences. You will have a much greater impact with a personalized letter!
I am a ____________ (small-scale cattle owner, sale barn owner, patron of my local sale barn, dairy cow owner, etc.). I am opposed to the proposed rule that would require sale barns to identify all breeding age cattle, dairy cattle, and show cattle. The agency has failed to show how the benefits of this proposed rule outweigh the costs, which go beyond simply the cost of the tag. If new identification requirements are needed due to the ending of the brucellosis program, the agency should first do an analysis of the costs and benefits so as to impose the least burden possible.
NEW REQUIREMENTS FOR AGRICULTURAL SALES TAX EXEMPTION
Under Texas law, many agricultural inputs and products are exempt from sales tax. Some of these are only supposed to be exempt when exclusively used on a farm or ranch for the production of food or other agricultural products for sale. In the last legislative session, the Texas Legislature passed HB 268, requiring that a person claiming an exemption from sales tax for those items must provide a registration number issued by the Comptroller of Public Accounts.
You do NOT need to register in order to buy farm animals, feed for farm animals, or seeds for growing human or animal feed. All of these continue to be exempt from sales tax without needing a registration number.
You will need to register to get a sales tax exemption for supplies such as fertilizer or farm equipment.
The Comptroller has a list of what does and does not require a registration number available at: www.window.state.tx.us/taxinfo/taxpubs/tx96_1112.pdf
If your local feed store tells you that you have to provide a registration number to buy feed or seeds, then print out the Comptroller’s flyer to show to the feed store owner. Again, you do NOT need to register in order to buy farm animals, feed for farm animals, or seeds for growing human or animal feed.
More information is available at www.window.state.tx.us/taxinfo/agriculture