Beginning farmers looking to purchase land and equipment from retiring farmers could benefit from a bill sponsored by Sen. Tom Whatley, R-Auburn.
SB 168 would provide income and business privilege tax credits for the sale or rental of agricultural assets to beginning farmers.
“Throughout my travels across the state and visiting with young farmers, there has been a common theme — these young guys are having a difficult time getting started,” Whatley said. “This bill would help older farmers pass along their life’s work to young farmers while helping the next generation get started. It’s a win-win.”
A similar bill was signed into law by Minnesota’s governor last year.
The bill provides a credit for 5 percent of gross rental income for the first three years of a rental agreement, up to a maximum of $7,000 per year, or 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. It also would allow up to $32,000 in credit 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 asset to relatives.