WATERLOO - Northeast Iowans hoping to buy a pumpkin today could get a trick or treat - depending on how people look at it - from the Iowa Department of Revenue.
The government decided pumpkins are sold primarily for Halloween decorations and not food, so it decided to tax the orange fruit this year. The problem, though, is many local pumpkin growers didn't know it.
So, depending on who knows about the new tax, buyers will either have to pay few more cents to make jack-o'-lanterns today or not.
Mark Litteaur, a vegetable grower near Waterloo, raised about 400 pumpkins this year and sold almost all of them at local farmers markets. He didn't know about the tax until the Courier asked about it, so customers benefited.
"I guess I can retroactively pay the tax," Litteaur said, noting the unexpected news this morning will dig into profits. "I wish it wasn't, but I can see their (government's) point. For years we've been paying taxes on miniature pumpkins, gourds and decorative corn."
Iowans planning to eat pumpkins can still get a tax exemption if they fill out a form. Local growers say buying for consumption is a rarity these days.
Previously, pumpkins had been considered an edible squash and exempted from the tax. The department ruled this year that pumpkins are taxable - with some exceptions - if they are advertised for use as jack-o'-lanterns or decorations.
"We made the change because we wanted the sales tax law to match what we thought the predominant use was," said Renee Mulvey, the Department or Revenue's spokeswoman.
The new policy, published in the department's September newsletter, has some pumpkin farmers feeling tricked this Halloween.
Don Beck, a vegetable producer near Buckingham, was also shocked to hear about the change this morning.
"To be honest, I didn't know about it so I never charged (the tax). I don't think anyone did," he said, referring to colleagues at farmers markets. "I suppose they're technically not being used for food and should be taxed … but we all know what the reason is to tax them."
Mulvey said department officials don't know how much extra revenue to expect from the pumpkin tax, but local growers say it will eventually hit home - either in less profit or higher prices to consumers.
Danny Carroll, who owns Carroll's Pumpkin Farm in Grinnell with his wife, said he will have to pay the sales tax out of profits.
"Essentially, they just reduced our income by 6 percent," he said. "It's too bad, but it's not surprising."
A few growers said they have been charging the tax this Halloween season and few customers have complained. None said they are asking customers to fill out the tax-exemption certificate.
Bob Kautz, who's owned Buffalo Pumpkin Patch in Buffalo, about eight miles west of Davenport, for seven years says he doesn't mind paying taxes, but this one is ridiculous.
He was particularly dismayed with the notion of requiring customers to fill out a form verifying that they planned to eat the pumpkins they were buying.
"It's another crazy, crazy, stupid thing," he said.
The Associated Press contributed to this story.
Contact Matthew Wilde at (319) 291-1579 or matt.wilde@wcfcourier.com.
Posted in Metro on Wednesday, October 31, 2007 12:00 am
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