Legislation to provide income and business privilege tax credits for the sale or rental of agricultural assets to beginning farmers passed the Senate Finance and Taxation Education Committee Wednesday.
SB 168, sponsored by Sen. Tom Whatley, R-Auburn, aims to help young farmers looking to purchase land and equipment from retiring agriculturalists. A similar bill was signed into law by Minnesota’s governor last year.
The bill would provide a credit for 5 percent of gross rental income for the first three years of a rental agreement, up to $7,000 per year. It also would provide a credit of 10 percent of the cash equivalent of gross rental income for the first three years of a share rent agreement, not to exceed $10,000 per year. Up to $32,000 in credit would be available for the sale of agricultural equipment and other assets, based on 15 percent of the sale price or fair market value.
Whatley’s bill prevents family members from taking advantage of the tax credit when selling or renting agricultural land and assets to relatives.
The Federation supports this bill.