overview of what what vermont compost is all about who it provides compost to its importance to agriculture in vermont we particularly are interested in organic agriculture of course so just a little overview of what's going on here and who  it's i came to composting from vegetable growing organic vegetable growing i became aware very early in my vegetable growing career that the compost was going to be very important to sustain vegetable growth and i had come from dairy background small scale vermont style which also included poultry and equines and i knew that blending of all those manure is made for powerful fertility so we founded vermont compost incorporated in one thousand nine hundred three with the intention of using otherwise undervalued or squandered or wasted resources and combining them with agricultural resources to produce composts and compost based growing mixes that we thought of as suitable for organic food production we have five hundred ninety four as of april first i think we had five hundred ninety four commercial customers and two hundred eight of them are in vermont and i know i mean we're an organic farming association compost is the is the so so so you know the reason we're here today and what prompted our discussion here today is because there's an issue that's come up that just doesn't make any sense and doesn't and actually is counterproductive in terms of commercial growers being able to make a living and be profitable doesn't make any sense from a closing the loop perspective and doing making you know responsible decisions and having responsible practices in the communities and on  farms and this issue has to do with the taxation of compost unfairly we want to talk about that here today and maybe you could just give us an overview of what this issue is and you know what is it that's unfair about the taxation the state taxation of your products and the and compost produced by other composers when we incorporated a business in one thousand nine hundred three we shortly thereafter got a sales tax identification or a sales tax account to so that we could sell t shirts and hats which in those days actually were subject to sales tax which they're not anymore but over the years we've sold a few of the things we've sold books and calendars and we have been filing with the tax department i think since ninety four but small amounts of money and so they anyway and we had conversations about the comp taxability of composted harvey show over the years with folks because we write monthly or were handy to go visit and folks from the tax department and we always said and they'd agreed that whenever and wherever composter compost products are used to grow food if the purchasers stated intention is that they intend to grow food then it's not sales taxable and requires no paperwork just like my god like an egg like a tomato and in those days a tomato seed wasn't taxable anything used to grow the tomato wasn't taxable synthetic fertilizers wasn't taxable it if you these things wasn't taxed they were not taxed they were not taxed prior to two thousand and nine there was a lot change in two thousand and seven ok the laws changed in two thousand and seven affected home gardeners retail sales for lies or so home home gardeners are now being charged for pesticides and fertilizers sales tax and in most places undoubtedly compost products because the tax department is good in giving that opinion to retailers pretty aggressively since they made the law change they haven't really outreach to farmers what they have now said in our case is that even farmers when they're buying compost or parting so as production inputs that those are never untaxed even if so it's quite a perverse and bizarre subject to the tax what about other inputs that commercial farmers know fertilizer is specifically exempt in the laundry list in the law so pesticides are exempt in the laundry list and the law bale string is exempt silo covers are exempt plastic for story i'll tell the story a bit so out of the clear blue sky in august of two thousand and twelve we get a letter announcing that they've reviewed our sales tax filings for two thousand and nine ten and  sorry nine ten eleven they've reviewed and they note that we paid very little sales tax and they want to audit us because of that so call up the person and say well you know we we don't we we only charge sales tax on books and calendars and we don't sell out of books and calendars clothing that had some teachers or no tags anymore and we don't really sell i mean we sell these food producing things and we don't charge tax for that she said well your website says you also are good for ornamental plans somewhere somebody some time wrote  praise and food and ornamental websites yes you could and that taxonomy is confusing enough as it is because some you've got people some of them charging sales tax for viola's and some not well you know i have a lot of my book keepers or growers she charges sales tax for viola because it's a flower so a woman she charges for geranium but she doesn't charge for a tomato or a time plant or rosemary plant so woman said well i'm i use the viola's as salad which is perfectly legitimate becoming mainstream thing she shouldn't be paid because intent it says in law if a person presents itself including corporate as a farmer that you're supposed to take their word for it and not and give them the exemption it's in the law so that tax time came to us and said look you don't pay tax on this i said but we've been through this before we've had these conversations and of course they said you have this in writing and i said well in the vermont where that conversation happened they're having a conversation no paperwork generated you know we were filing the whole time our books are your books do you know you of course any time you want but i don't think you should be audited ing me based on a policy something that needs to be decided at a policy level because it's very expensive to audit somebody and you have no this this is the taillight out of prime aphasia case and they said oh wise guy and they took the our federal income tax filing as a company and they pointed their laser six percent gun at it and delivered themselves of a workbook assessing a three hundred ninety four thousand dollar  penalty for noncompliance you would not collect the tax from the gro no no no no yeah ok so they so well that got my attention as it was intended to do them so what's the fix pay them but  audited i've made my arguments to my auditors the invoice has been delivered and that's about one hundred sixteen thousand dollars right now and that includes some penalties the max they're asking for the max which that's new they didn't used to go for the maximum penalties of after all pretty clear we didn't know this was happening in the room we were been doing business this way for a long time filing it with the state there's six thousand feet from their office to my office it took three years to get here which again you know that's just how they had debts no none of that is mitigating per se in law but so they delivered themselves of the invoice and we now have thirty sixty days to make an appeal of their decision which we are intending to make and we're going to make it on thursday the eighth of august and we're going to do it a little shoulder to shoulder at the tax commissioner's office because we really feel like the politics of this is we don't understand it fully or what the name of the game really is but why they're instead maybe insisting on clarification from the i mean what they say is they think this is how the law is now and they need the some a couple of steps that i think i hope it actually is going to be possible at the no four web site to find information about the events that were showing up at the livery of the appeal on august eighth i like to think the vermont compost website will have something useful and i would think people are also going to be able to and should contact their legislators legislators and say you know what senators this bill is going to be working its way through we want you to support it it just makes good legislators allege there are several of them in the state house always say the same thing when somebody says i want for laws are on the list they say we shouldn't make a list we should define a group a category and then because it's not on the list the exemptions are narrow and the tax department if it's not on the list it's not on the list how stupid it is that's up to the legislature that's what the legislators the approach the legislature is taking trying to come up with something they're talking about adding to the list because let you know are we deal with regulators at the agency of natural resources and a little bit of the policy level but the agency of natural resources has a big set of dogs in this fight if they want to achieve the phosphorus reductions that are mandated