<b>By SHELLY STRAUTZ-SPRINGBORN<br>
Michigan Correspondent</b> </p><p>

GRAND RAPIDS, Mich. — Michigan Farm Bureau members reinforced their opposition to the state’s new service tax by voting in favor of policy that called for the tax to be repealed during the organization’s 88th Annual Meeting in Grand Rapids last week.</p><p>
“Agricultural commodities produced and stored in other states are not subject to a tax like this,” said MFB President Wayne H. Wood. “This service tax works against the Michigan agriculture industry’s competitiveness in a global arena and is a disincentive to doing business in Michigan.”</p><p>
The tax briefly took effect Dec. 1, after last-minute efforts in the Michigan Legislature to derail the tax failed to be approved before midnight on Nov. 30.</p><p>
However, Michigan Gov. Jennifer Granholm and state lawmakers succeeded in repealing the tax during the afternoon of Dec. 1. </p><p>Services subject to the new 6 percent tax would have included storage and warehousing, business consulting and landscaping – all services that play an important role in the state’s $60 billion agriculture industry. Industry experts said the tax would have made Michigan agriculture less competitive.</p><p>
One of the agriculture industry’s biggest concerns centered on the taxing of storage services, especially those of perishable agricultural commodities which require unique storage between harvest and the time of consumption. </p><p>
Many agricultural products, ranging from apples to onions, are consumed year-round and require year-round storage. The service tax had the potential to tax a commodity multiple times as it makes its way through the food chain, first as a raw product, then as a partially processed produce and finally as a finished product.
The far-reaching tax also could have applied to the storage of corn or wheat by an elevator or warehouse for later use by an ethanol plant or wheat milling company.</p><p>
To add to the complexity, many contracts already have been negotiated for the next production year, meaning farmers would be absorbing added expense without any way of passing on the costs.
A separate MFB policy approved by the organization’s membership concerning taxation vs. fees, spells out MFB members support a “broad-based tax” because this approach is “more equitable than a ‘fee,’ which is an economic liability on the permit holder, not based on the ability to pay.”</p><p>
In other action, members added language to the organization’s elections policy that “considers” support of a part-time legislature, partially in response to the organization’s unhappiness with the legislature’s handling of the service tax issue.</p><p>
The policy states that “MFB would consider supporting a part-time legislature, provided other legislative reforms are implemented to maintain a balance of power between the three branches of government. Such reforms might include timeframes for budget approval, greater legislative oversight of state departments and the rules process, and review of legislative compensation process, etc.”</p><p>
New this year, MFB members expanded their stand on biomass and renewable products and energy, suggesting research into expanding ethanol fuel options beyond the conventional E10 blend.</p><p>
“All cars on the road today can run on E10. Some newer vehicles can take fuel with an 85 percent blend, but those vehicles aren’t in wide use today and the pumps dispensing E85 are very limited. The thinking with this resolution is that options should be explored to offer motorists blends such as maybe E12 or E20, basically a blend that would use more ethanol while still maintaining engine efficiency and performance without requiring modifications to a standard gas engine,” said Sarah Black, director of the MFB Public Policy and Commodity Division.</p><p>
Other policies approved by members of the state’s largest farm organization deal with the Michigan Department of Agriculture, protecting the Great Lakes water supply, animal care and others.