In January, tens of thousands of farmers stand to lose their sales tax exemption on inputs if they fail to fill out a simple form and pay $20-$25.

Though the process to keep the exemption is easy, only a fraction of the 40,000 to 65,000 producers in Georgia have applied for the new GATE (Georgia Agriculture Tax Exemption) card, and officials are starting to get nervous about what will happen in the new year.

In the past, a buyer just had to sign an affidavit at the time of purchase, swearing that his business was farming – but no proof was required. Now, as a part of a massive tax reform started by the governor’s office, the state is setting up a sort of licensing system.

Farmers, ranchers and agricultural services (like cotton ginning businesses) now are required to submit an application to the Department of Agriculture once a year and get a GATE card to show when they purchase inputs.

 “There was a loophole in the system,” said Jack Spruill, who directs the marketing division of the Georgia Department of Agriculture.

“Growers or ranchers would come in to make a purchase and the store owner would say, ‘Are you a professional working in the production of agricultural products?’

“There were no criteria for who qualified for a tax exemption, so anyone could say ‘yes’ and not pay taxes.”

The new GATE card is meant to fix that and ensure that only agricultural producers get the tax break intended for them.

Since the agriculture department started to qualify farmers on Nov. 14, only about 4,000 have signed up. About 500 more register each day, but the total still is only about one-tenth of the farmers in Georgia.

Farmers will have to have a GATE card if they want to continue to geta tax break on inputs. Buyers who don’t apply likely will befrustrated when they try to buy inputs early next year and either haveto pay sales tax or wait until they get an approved GATE card.

“Those will be angry consumers,” Spruill said.And no one is sure how many farmers in Georgia will qualify for a card. The Athens office of the USDA estimates at least 40,000 agriculture producers may qualify, but others put the number in the 60,000 to 65,000 range, Spruill said.

“The word of mouth is growing, but we would love to have more publicity about this,” he said. Vendors also are worried that customers either don’t know about the GATE card or are procrastinating about signing up.

“We are kind of concerned for our growers that they get this exemption applied for and get an exemption number,” said Judy Sherling, controller for R.W. Griffin’s feed, seed and fertilizer warehouses. Retailers are quickly catching up on the details of the program and encouraging customers to apply – even helping them to fill out the online form at R.W. Griffin.

“Some customers don’t have email. They have chosen not to enter cyber space,” Sherling said.

And she worries that if most of those customers wait any longer to send in their paperwork via the U.S. Postal Service, their applications will be bogged down in the high volume of Christmas cards.

Registering online at www.agr.georgia.gov – the route that nearly 90 percent of farmers have used when they signed up – allows a farmer to print a card with an exemption number immediately. Through traditional mail, however, the farmer must wait for the card to arrive. If the agriculture department gets back-logged with late applications, those growers will have to wait to buy inputs or pay sales tax, Sherling said.

“If somebody comes in on the 3rd or 4th (of January) and tries to buy $1,000 of inputs, but doesn’t have a card, they are subject to 7 percent tax,” she said. “You are not exempted from owing that tax just because your application is pending.”

While many growers have learned about the GATE card through the local extension service, their electricity provider or seed and equipment retailers,

“I think the word is starting to get out. But just two weeks ago, I didn’t even know this existed. We are just trying to get this handled,” Sherling said.