LAKELAND, FL - As tax season looms over the country, Florida citrus growers are looking for a change in federal tax law. Their proposed tax change would allow them to immediately write off the cost of planting new citrus groves.

The change, potentially worth billions of dollars for the Florida citrus industry, could provide the incentive to growers to increase planting new groves, according to Florida news source, The Ledger.

"We have a huge infrastructure — a tremendous brand, millions of trees, processing plants and packinghouses," said Larry Black, President of Florida Citrus Mutual. "We know we have to increase the replanting rate to support the infrastructure we've built."

The current law forces growers to wait until a new grove begins producing income, generally in the fourth year after planting. Citrus Mutual in Lakeland, the Florida’s largest growers’ representative, is the main force behind lobbying for the tax law change.

"This industry is in financial hurt, and we need the support of these tax incentives to get back on our feet," said Mike Sparks, the trade group's Chief Executive. "This is a heavy lift, but we're hopeful this can be done in 18 months to two years.” 

Florida citrus is also reeling from damage by citrus greening. Sparks estimates that the industry needs a net gain of 20 million new orange trees over the next 10 years just to return to 2005 commercial tree counts. A recent study by Southern Gardens Citrus Corp. in Clewiston showed growers would need to plant 3.1 million orange trees annually to maintain current production levels.

According to Fritz Roka, an Economist at the Southwest Florida Research and Education Center, the current tax law will force growers to spend $8,000 to $10,000 per acre on planting a new grove before they can begin depreciating those expenses.

That adds up to $1 million for a 100-acre grove and $20 billion if the industry were to plant 20 million trees in 10 years as Sparks has suggested.

"I'm not sure it would give bigger growers an incentive, but it might help some medium-sized growers," said Roka, referring to growers with less than a few thousand grove acres.

But Black and Sparks both said the tax change would be quite the benefit to growers.

"As an investor, the grower is looking for an attractive return on his investment. By inserting the tax benefit during the time he's developing the grove, he's substantially increasing his return," said Black, whose company has planted more than 200 new grove acres in recent years. "I'm going to pay taxes on my income. If I can defer them, it's more attractive.”

This tax also offers the question, will California citrus growers also seek changes in the tax law?

With thousands of dollars in potential earnings increases, it is certainly something the California legislature should consider.

Florida Citrus Mutual