Conservation Sales Tax

Summary

In addition to the American System of Conservation Funding, some states have begun to seek alternative methods of funding for their fish and wildlife agencies. A conservation sales tax on all taxable goods is one such mechanism that states might consider implementing. This excise tax is primarily applied to sporting goods such as firearms and ammunition, as well as archery equipment, fishing tackle, and motor boat fuel. Through this mechanism, the monies collected are deposited into an account to be used expressly for conservation purposes.

Introduction

Most state fish and wildlife agencies are funded primarily by sportsmen, both through the collection of license fees and from excise taxes through the American System of Conservation Funding on sporting goods such as firearms and ammunition, as well as archery equipment, fishing tackle, and motor boat fuel. The American System of Conservation Funding is built on the concept that those who consumptively use natural resources should pay for the privilege, and in some cases, the right to do so. However, due to the increasing costs associated with natural resource management over the past several decades, some states have sought alternative methods of funding the agencies responsible for managing those resources.

One such alternative funding mechanism is a conservation sales tax on all taxable goods. Through this mechanism, the monies collected are deposited into an account to be used expressly for conservation purposes. Creating a conservation sales tax is an innovative approach that several states have taken to establish a reliable alternative funding mechanism.

Points of Interest

  • Typically, the tax equates to 1/8th of 1% of the price of all taxable goods.
  • According to the Missouri Department of Conservation, at least $100 million has been generated by the conservation sales tax every year since 2012. Though legislative attempts to repeal Missouri’s conservation sales tax are not uncommon, no attempts to put the tax back before the Missouri electorate have been passed by the legislature.
  • Although the potential benefits for conservation are large, these taxes can be difficult to implement, as an amendment to the state’s constitution and a ballot referendum are often required.
  • In 2008, voters in Minnesota approved a ballot measure (Clean Water, Wildlife, Cultural Heritage and Natural Areas Constitutional Amendment) which raised the sales tax by 3/8th of 1%, and to date the tax has generated more than $2 billion for outdoor recreation and conservation.
  • In 2010, Iowa voters passed a constitutional amendment that established the Natural Resources and Outdoor Recreation Trust Fund. Unlike prior conservation sales tax amendments in other states, the effort now requires a separate act of the legislature to increase the state’s general sales tax. Members of the Iowa legislature, the conservation and agricultural communities, and the Governor are working together to build a winning strategy to finally fund the Natural Resources and Outdoor Recreation Trust Fund.
  • In this structure, all consumers, including both the consumptive and non-consumptive users of the natural resources, bear a portion of the responsibility for paying for natural resource management.
  • In 2018, Oregon proposed the Oregon Conservation and Recreation Fund (HB 4015), which creates a fund whose proceeds would provide supplementary funding to the Oregon Department of Fish and Wildlife. Discussions regarding providing a regular stream of income to this fund centered on potentially increasing the state’s bottle tax.
  • In 2020, New Jersey passed Senate Bill No. 3230 which appropriates $30.3 million in Corporate Business Tax revenues to the Department of Environmental Protection for state acquisition purposes.

Moving Forward

If carefully implemented, this form of conservation funding can complement the highly successful American System of Conservation Funding. Once implemented, the taxes are extremely difficult to divert and result in potentially large and reliable funding increases for state fish and wildlife management agencies. It is recommended that language concerning a conservation sales tax be crafted in consultation with your state’s conservation and agricultural organizations as well as your state fish and wildlife agency.

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