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SF1419 (Legislative Session 94 (2025-2026))

Agricultural assets owners available credit cap elimination provision

Related bill: HF1626

AI Generated Summary

The legislative bill S.F. No. 1419 aims to support beginning farmers by enhancing the tax credits available to owners of agricultural assets who sell or rent these assets to new farmers. Specifically, the bill proposes:

  1. Removing Limits on Tax Credits: It eliminates the cap on the total amount that can be claimed as a credit. This means that asset owners can claim more significant tax benefits when they help starting farmers.

  2. Tax Credit Details:

    • For sales, the asset owner can claim an 8% credit of the lesser of the sale price or the market value of the asset, up to $50,000.
    • For cash rentals, a 10% credit of the gross rental income for the first to third years, capped at $7,000 per year.
    • For share rent agreements, a 15% credit of the equivalent gross rental income for the first to third years, capped at $10,000 per year.

  3. Rental Agreements: The bill specifies the types of rental agreements eligible for these credits, including both cash rent and share rent agreements, which must be rented at prevailing community rates.

  4. Authority Approval: Credits can only be claimed after being approved and certified by the relevant authority. If a rental agreement is terminated without fault from the owner, credits are still valid unless the authority finds the owner at fault.

  5. Repayment Clauses: If an agreement is terminated and the owner is at fault, any credits received must be repaid as additional income tax.

  6. Credit Carryovers: If the tax credit exceeds the owner's tax liability, the excess can be carried over to future tax years.

  7. Family and Emerging Farmer Adjustments: Special provisions adjust credit eligibility and rates when agricultural assets are sold to family members or emerging farmers.

This bill is intended to incentivize experienced agricultural asset owners to support and facilitate the entry of new and beginning farmers into the agricultural sector by providing financial benefits.

Bill text versions

Actions

DateChamberWhereTypeNameCommittee Name
February 16, 2025SenateFloorActionIntroduction and first reading
February 16, 2025SenateFloorActionReferred toTaxes
March 05, 2025SenateFloorActionComm report: To pass as amended and re-refer toAgriculture, Veterans, Broadband, and Rural Development
March 05, 2025SenateFloorActionAuthor added

Citations

 
[
  {
    "analysis": {
      "added": [
        "Expands credit eligibility for sales to emerging farmers by increasing the credit rate from eight percent to twelve percent."
      ],
      "removed": [],
      "summary": "This bill modifies the tax credit for owners of agricultural assets as outlined in section 41B.0391.",
      "modified": [
        "Adjustments to the maximum credit limits applicable to different types of agreements."
      ]
    },
    "citation": "41B.0391"
  },
  {
    "analysis": {
      "added": [
        "A provision addressing credit carryover for beginning farmer incentive credits."
      ],
      "removed": [],
      "summary": "This bill makes amendments related to tax computation under section 290.06.",
      "modified": [
        "Clarifies the tax liability computation related to credits under this chapter."
      ]
    },
    "citation": "290.06"
  }
]

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