March 11, 2013
Creating funds for education could have some devastating consequences if the proposed business margin tax takes effect. The tax would affect businesses that make more than a million dollars a year, and the owners of a local family-run dairy say it could be the end of a company they’ve run for generations.
At the Olsen family’s Hillside Dairy in Fallon, they milk 2,000 cows three times a day, which gets them about 6.5 million gallons of milk a year.
“We’ve been in the dairy business in Nevada since 1915, and over in Denmark 200 more years,” said Eric Olsen, Hillside Dairy partner.
Olsen runs the dairy with his dad and brothers.
The Olsen brothers have spent their entire lives in the dairy business.
Pete Olsen says the last few years have been the toughest.
“We’ve had three of the last four years that we’ve actually lost money,” he said.
Now the Olsen brothers say they’re facing about 150 thousand dollars in additional taxes if the business margin tax is approved.
Pete said the timing couldn’t be worse.
“We need to double the dairy production in Nevada, and here comes this tax that’s going to hit us and we have no way to recover it,” Pete said.
Because wholesale milk prices are standardized nationally, they can’t pass on the cost to customers.
“So we have no ability to go out and charge more for our product,” Pete said.
Much of the money they do make goes to feeding the cows and paying the employees.
“The big gross that you get, there’s not much of it that stays behind,” Eric said.
So if the business margin tax happens, it could be the end of Hillside Dairy.
“I don’t want to say this is the straw that breaks the camel’s back but it might be,” Pete said.
“We probably would just farm,” Eric said. “We’d have to get rid of the cows.”
Which could impact northern Nevadans in a big way.
“You’d have milk but it wouldn’t be fresh,” Eric said.
With a 300-year-old family business on the line, the Olsen’s have even more to lose.
“It would be tragic as far as we’re concerned because we love the cows,” Eric said.
Pete Olsen said their family supports education – his wife, daughter, and daughter-in-law are all teachers. But he says this tax will hit the agriculture industry too hard and there has to be a better way to fund education.
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