Payroll-tax exemption eyed for local farms

Farmers would no longer pay payroll taxes used to support the Long Island Rail Road under a bill being debated in Albany.

The legislation would exempt farms in the 12-county region served by the Metropolitan Transportation Authority from a payroll tax adopted in 2009. The levy helped bail out the financially strapped operator of the LIRR, New York City subways and other mass transit.

The payroll tax enraged businesses, particularly in areas with little train service such as the East End. It also contributed to last year's defeat of two area state senators and the GOP recapturing control of the upper chamber.

A spokesman for the Senate's Republican majority said the tax exemption bill is expected to be voted on before the legislature adjourns its regular session on June 20.

The MTA payroll tax has become an irritant for farmers, some of whom are struggling to compete against rivals in states with lower costs. The number of farms in New York fell last year for the first time since 2006, according to the National Agricultural Statistics Service.

"This tax just seems so unfair because we're not getting service . . . the Long Island Rail Road has cut back on the East End," said Frank Beyrodt Jr., executive vice president of DeLea Sod Farms, which operates 10 to 15 farms locally and others in southern New Jersey. The third-generation, family-owned business supplies turf to golf courses and baseball fields such as Bethpage Ballpark in Central Islip and Yankee Stadium.

Beyrodt estimated the MTA payroll tax costs his company about $10,000 a year based on total wages paid to workers of $4 million. "This is an unnecessary added burden when we are already under such pressure as farmers from the weather and the economy," he said.

Beyrodt, as president of the Long Island Farm Bureau, is spearheading local efforts to secure passage of the tax exemption bill, called the Farmers Regulatory Relief Act.

Authored by Sen. Patty Ritchie (R-Oswegatchie) and Assemb. Bill Magee (D-Nelson), the legislation is co-sponsored by the Senate's deputy majority leader, Tom Libous of Binghamton, and four of Long Island's 21 Assembly members. An earlier version of the bill never came to a vote of either the full Senate or Assembly in 2009-10.

The measure now under consideration would also establish a refundable tax credit for farm improvements, lower filing fees for farms that are organized as partnerships or limited liability companies, and a reduced registration fee for farm trucks.

Wineries back the bill because it reduces paperwork requirements and eases licensing of custom-crush facilities, which produce wine for people who have grapes but no winemaking equipment. The changes were recommended by a 2007 state Wine Grape Task Force, led by Kareem Massoud of Paumanok Vineyards in Aquebogue.

A separate bill, from Sen. Kenneth LaValle (R-Port Jefferson) and Assemb. Fred Thiele Jr. (I-Sag Harbor), exempts farm wineries that sell bottles wholesale to restaurants and other retailers from having to file lengthy reports.

"These reports are bogus," said Larry Perrine, a task force member and partner in Channing Daughters Winery Llc of Bridgehampton. "They go unread and achieve nothing except taking me away from running the winery."