WASHINGTON, D.C.—Senator Susan Collins today sent a letter to Internal Revenue Service (IRS) Commissioner Mark Everson expressing her concerns regarding a recent IRS decision that affects Maine maple syrup producers.
Senator Collins was recently notified by the Maine Maple Syrup Producers Association that the IRS had informed Maine oil dealers that they should collect a $.244 per gallon tax on fuel delivered to maple syrup producers. This tax is equivalent to the federal road fuel tax for diesel fuel. However, maple syrup producers believe they should qualify for an agricultural exemption because the fuel is critical to the production process.
Following is the text of the letter to Commissioner Everson.
The Honorable Mark W. Everson
Commissioner
Internal Revenue Service
Room 3000 IR
1111 Constitution Avenue, N.W.
Washington, DC 20224
Dear Commissioner Everson:
I am writing to express my concerns regarding a recent decision of the Internal Revenue Service (IRS) that affects maple syrup harvesters in Maine.
Maple syrup harvesting is an important part of Maine’s agricultural production. Harvesters are located throughout the state and tap up to 1.5 million trees annually. According to the U.S. Department of Agriculture’s National Agricultural Statistics Service, 290,000 gallons of maple syrup were harvested in Maine in 2004, generating $5,626,000 in income. Maine is the nation’s second largest maple syrup producer, and the industry makes a considerable impact on local economies.
I was recently contacted by the Maine Maple Producers Association, which alerted me to a change in IRS policy as it affects maple syrup harvesters. The IRS has decided to assess a tax of $0.244 per gallon for fuel used by harvesters. I am concerned that this additional tax on the industry will adversely affect maple syrup harvesters in Maine.
The Maine Maple Producers Association explained that this tax will be applied to fuel that is not used for transportation, but is used as part of the maple syrup production process. Maple syrup harvesters rely on fuel for condensing sap into syrup, for generators, and for off road uses. All of these uses are part of the maple production process, which is agricultural in nature.
Maple syrup harvesters are treated as agricultural producers by the U.S. Department of Agriculture, which collects information on this enterprise. I request that IRS reevaluate its recent decision to tax fuel used by maple syrup harvesters, and recognize the inherent agricultural qualities of this industry.
Thank you for your consideration of my request. I look forward to your response regarding this matter.