Louisiana Sheriff Loses Tax Lawsuit Targeting Smith Angus Farm
Multiple state agencies told Sheriff Randy ‘Country’ Seal that he had no right to collect taxes from a rancher in his parish. He sued anyway.
Louisiana cattle rancher Jason Smith has won a case filed against him by a county sheriff who wrongly claimed a state law that exempts Louisiana farm products from sales taxes didn't apply to Smith's meat sales.
A decorated Marine Corps veteran, Smith retired from the service several years ago to go work with his dad at Smith Angus Farm, a ranch that's been in the family for more than 100 years.
"The ranch has sold its beef directly to consumers since 2019, and it's a key part of the business," NOLA.com reported last week. "But selling meat has the Smith family farm at odds with Washington Parish Sheriff Randy 'Country' Seal, who has sued in state court, alleging that Smith's sales aren't covered under a state law that allows Louisiana farmers to sell many products tax-free."
The sheriff's interpretation of the law was news to Smith. "I was like 'you gotta be kidding me,'" Smith said. But Sheriff Seal, who Smith pointedly notes "is also the tax collection authority here," was not kidding.
Before Seal decided to target him, Smith had no reason to think the tax-exempt farm products he sells directly to consumers were taxable. The trouble for Smith, whose ranch occupies 240 hilly and bucolic acres, began last fall when Seal, an elected Republican sheriff allegedly acting on the advice of counsel, determined such foods as steaks and ground beef are not tax-exempt farm products.
"The tax collector maintains that the term 'livestock' is not the equivalent of ground meat or other processed meat items sold direct from a farm," Seal told the court.
Farm products sold by a producer directly to consumers are explicitly exempt from sales and use taxes under Louisiana's revised statutes ("The gross proceeds derived from the sale in this state of livestock, poultry, and other farm products direct from the farm are exempted from the tax levied by taxing authorities, provided that such sales are made directly by the producers.") and tax code ("Any sale of livestock, poultry, or other farm products made directly from the farm and directly by the producer regardless of the purpose to which it will be put when sold is exempt from these taxes.").
If that wasn't clear to Seal, then an October ruling by the state's department of revenue titled Sales Tax Exemption Applies to Sales of Farm Products 'Direct from the Farm' by the Producers, issued the same month Seal filed suit against Smith, should've made it so.
If that still didn't clear things up for Seal, the letter Louisiana Agriculture Commissioner Mike Strain sent to the sheriff probably should've driven the point home. "Based on these statutes, farm products raised on the farm and sold directly to consumers by the farmer are tax exempt," wrote Strain, who also noted the law "can't be any clearer."
But "can't be any clearer" still wasn't clear enough for Seal. Smith says he "reached out to the sheriff, but was told they 'were dead set on taking it to trial.'"
Seal was dead set on wasting taxpayers' money, wasting Smith's time and money, and losing in court. Last week, District Judge Alan Zaunbrecher sided with Smith.
"The court finds that the broad terms 'farm products' would include 'livestock' and 'livestock products," Judge Zaunbrecher ruled, NOLA.com reports, noting Smith's ranch "is clearly the producer of the farm product."
Smith, victorious, has dared "Country" Seal to appeal. "If he really believes in his case, and needs clarification on the English language, then he should appeal," Smith told Progressive Farmer in the wake of the ruling. "Otherwise, he should admit that he cynically brought this case forward in a shameless attempt to generate revenue by publicly apologizing and offering to pay my legal expenses."
In an obnoxious Facebook post over the weekend, the Washington Parish Sheriff's Office said it would not appeal the ruling and attempted to explain why its office had gone after a local farmer.
"Sheriff Seal filed the lawsuit on behalf of the citizens of Washington Parish, all of whom benefit from the collection of sales tax which is distributed to various recipients, including school systems, parish and municipal governments, law enforcement agencies and other entities as specified by law," the post declares. "The litigation was filed on the advice of counsel and with no animus against any parish business."
Balderdash. I think Smith got it exactly right: "Country" Seal's actions were nothing more than a cynical and shameless attempt to generate revenue by ignoring the letter of the law.
Smith says the idiotic lawsuit against him has had a silver lining. "Randy Seal has drummed up a lot of business for me," Smith told NOLA.com. "I have people for bulk orders, lots of people just wanna buy a couple packages of steaks."
While the judge's ruling this month only applies to Smith, it should also protect at least 100 other Louisiana farmers and ranchers who sell products from their farms directly to consumers in the state. Indeed, if the judge had ruled otherwise, "it could mean that dozens of other farms around the state that sell their goods could be forced to pay sales taxes, which would mean higher prices for customers that might drive down demand for their locally produced products"—causing "huge losses" for Louisiana's small ranchers.
"[T]he producer here was selling meat from animals grown on its land and was therefore exempt from the tax requirements the agency attempted to impose," says Alexia Kulwiec, executive director of the nonprofit Farm-to-Consumer Legal Defense fund (where I serve on the board). "As consumers continue to demand locally produced foods, government agencies should be making it easier rather than more difficult for small producers to provide nutritious food in their communities."
I'm glad Washington Parish residents are supporting Smith. I hope those same residents vote to recall Seal. With animus.