All Louisiana Farmers Should Pay Close Attention to This Tax Case

Farming is such a huge part of Louisiana's economy.

Whether it's cattle, sugarcane, rice, cotton, or any other crops grown and harvested by our great farmers, this industry is vital not only to the state's economy, but also to those putting food on the table for their families. According to the University of Arkansas System's Division of Agriculture Research and Extension, $3.2 billion was generated by the farming industry alone in Louisiana in 2020.

As you can imagine, the farming industry generates quite a bit of tax revenue.

Well, Washington Parish Sheriff Randy "Country" Seal says one of his farmers owes nearly $40,000 in taxes and penalties and if he is right then that bill will not only affect that Mount Herman rancher but also farmers all across Louisiana.

Here's the issue: Sheriff Seal says the farmer has unpaid taxes from selling beef directly to customers on his farm. He says that processed meat is taxable and the rancher owes the huge payment.

Louisiana Agriculture Commissioner Mike Strain says this is such an important case.

“This could affect ALL the farmers in the state," says Louisiana Agriculture Commisioner Mike Strain to Louisiana Radio Network. "We have more than 100 farmers that sell meat from the farm so this will be a precedent case."

Strain says the Louisiana state tax code may actually be on the side of the rancher and cites this phrase from it.

The gross sales or proceeds derived from the sale of livestock and other farm products direct from the farm are exempted from tax levied by any taxing authority.

Strain says he sent Sheriff Seal a letter addressing this, so why is it not settled? Well, there appears to be a lack of clarity with the tax code. Strain maintains that processed meat falls under "food & groceries," which are tax exempt in Louisiana.

A judge will decide.

With so many farmers and ranchers selling meat and produce directly to customers without state or local sales taxes, you can imagine how a ruling in favor of the plaintiff (Sheriff Seal's office) could have a huge impact on the profits farmers make off of their business.

Don't be surprised if you see the Louisiana State Legislature take up the issue, especially if the judge finds in favor of the plaintiff.