Relates to providing a tax credit to farmers who sell or rent their agricultural land to a young farmer.
TITLE OF BILL: An act to amend the tax law, in relation to providing a tax credit to farmers who sell or rent their agricultural land to a young farmer
PURPOSE: To establish a tax credit for farmers who sell or rent their agricultural land to young farmers.
SUMMARY OF PROVISIONS:
Sections 1 and 2 of the bill amend sections 210 and section 606 of the tax law to create and allow for a credit for current farmers who sell or rent their agricultural lands to young farmers.
Section three provides for the effective date.
EXISTING LAW: Current tax law allows for various tax credits. It does not currently allow a credit for farmers who are considering selling or renting their agricultural lands to a young farmer. Such programs however, do exist in other states.
JUSTIFICATION: New York state tax law provides for various tax credits already. Allowing a tax credit for current farmers who agree to sell or rent their agricultural lands to a young farmer is good public policy. Taking steps to recruit young, new farmers to the agricultural profession is certainly one area in need of incentives, and helping to ensure agricultural lands are available for sale or rent to young or beginning farmers to get them started in the agricultural profession, is one way to provide that incentive.
Agriculture is the leading industry in New York, yet New York's farm community is aging and it has become increasingly difficult to attract young people to farming and to encourage younger generations to consider farming as a career. The average age of farm operators in New York is 59, and is expected to continue to increase unless steps are taken to reverse this trend. The U.S. Secretary of Agriculture has set a goal of recruiting 100,000 new farmers across the country to replace those who are retiring. By enacting a tax credit to encourage current farmers to sell or rent their land to young farmers, we will be taking one small step at helping that recruitment effort, and helping to keep agricultural lands in production, rather than losing them permanently.
Farming is a difficult business and there are many barriers to keeping current farm land in the hands of agricultural producers. As the current crop of farmers continues to age out of the business, we need to encourage these farmers to sell their land to those considering entering the profession. It is in the best interest of the state to ensure that enough producers are recruited and retained in agricultural production. Additionally, the recent increase in demand for quality fresh locally grown foods and beverages highlight the importance of assisting new farmers to enter the profession.
LEGISLATIVE HISTORY: This is a new bill.
FISCAL IMPLICATIONS: Undetermined. The bill allows a ten percent tax credit for the sale or use of agricultural land to a young farmer.
EFFECTIVE DATE: Immediately and shall apply to taxable years beginning on and after January 1, 2015.
STATE OF NEW YORK ________________________________________________________________________ 6882 IN SENATE March 25, 2014 ___________Introduced by Sens. RITCHIE, BALL, BONACIC, DeFRANCISCO, FARLEY, GALLI- VAN, GRIFFO, GRISANTI, LARKIN, LAVALLE, LIBOUS, LITTLE, MARCHIONE, MAZIARZ, NOZZOLIO, O'MARA, RANZENHOFER, ROBACH, SEWARD, VALESKY, YOUNG -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to providing a tax credit to farmers who sell or rent their agricultural land to a young farmer THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 210 of the tax law is amended by adding a new subdivision 48 to read as follows: 48. CREDIT FOR FARMERS WHO SELL OR RENT THEIR AGRICULTURAL LAND TO A YOUNG FARMER. (A) ALLOWANCE OF CREDIT. A TAXPAYER THAT IS AN AGRICUL- TURAL BUSINESS PRINCIPALLY ENGAGED IN FARMING, AS SUCH TERM IS DEFINED IN PARAGRAPH NINETEEN OF SUBDIVISION (B) OF SECTION ELEVEN HUNDRED ONE OF THIS CHAPTER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE SALE OR RENT OF THEIR AGRICULTURAL LANDS TO A YOUNG FARMER, AS DEFINED IN THIS SECTION. SUCH CREDIT SHALL BE TEN PERCENT OF THE PURCHASE PRICE OR RENTAL AMOUNT OF THE AGRICULTURAL LANDS. (B) FOR PURPOSES OF THIS SUBDIVISION, "YOUNG FARMER" SHALL MEAN A FARMER WHO HAS NOT PRODUCED AN AGRICULTURAL PRODUCT FOR MORE THAN TEN CONSECUTIVE YEARS, WHERE AGRICULTURAL PRODUCT MEANS ANY AGRICULTURAL OR AQUACULTURAL PRODUCT OF THE SOIL OR WATER, INCLUDING BUT NOT LIMITED TO FRUITS, VEGETABLES, EGGS, DAIRY PRODUCTS, MEAT AND MEAT PRODUCTS, POUL- TRY AND POULTRY PRODUCTS, FISH AND FISH PRODUCTS, GRAIN AND GRAIN PRODUCTS, HONEY, NUTS, PRESERVES, MAPLE SAP PRODUCTS, APPLE CIDER, FRUIT JUICE, HORTICULTURAL SPECIALTIES, AND CHRISTMAS TREES AND WHO WILL MATE- RIALLY AND SUBSTANTIALLY PARTICIPATE IN THE PRODUCTION OF AN AGRICUL- TURAL PROJECT. (C) PRIOR TO SALE, THE SELLER SHALL CONVEY TO THE DEPARTMENT OF AGRI- CULTURE AND MARKETS, AN EASEMENT, THE TERMS OF WHICH LIMIT DEVELOPMENT OF THE LAND TO AGRICULTURAL BUSINESS, PRINCIPALLY FARMING, AS SUCH TERM IS DEFINED IN PARAGRAPH NINETEEN OF SUBDIVISION (B) OF SECTION ELEVENEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13527-06-4 S. 6882 2
HUNDRED ONE OF THIS CHAPTER. THE EASEMENT SHALL EXPIRE NOT LESS THAN TEN YEARS FROM THE DATE OF SALE. S 2. Subsections (yy) and (zz) of section 606 of the tax law, as relettered by section 5 of part H of chapter 1 of the laws of 2003, are relettered subsections (yyy) and (zzz) and a new subsection (xx) is added to read as follows: (XX) CREDIT FOR THE SALE OR RENT OF AGRICULTURAL LAND TO A YOUNG FARM- ER. (1) ALLOWANCE OF CREDIT. A TAXPAYER WHOSE FEDERAL GROSS INCOME FROM FARMING FOR THE TAXABLE YEAR IS AT LEAST TWO-THIRDS OF EXCESS FEDERAL GROSS INCOME SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR THE SALE OR RENT OF AGRICULTURAL LAND OR EQUIPMENT TO A YOUNG FARMER, AS DEFINED BY SECTION TWO HUNDRED TEN OF THIS CHAPTER. SUCH CREDIT SHALL BE TEN PERCENT OF THE PURCHASE PRICE OF RENTAL AMOUNT OF THE AGRICULTURAL LAND, AND SHALL BE ALLOWED NOTWITHSTANDING SUBSECTION (KK) OF THIS SECTION. (2) DEFINITIONS. FOR PURPOSES OF THIS SUBSECTION, THE FOLLOWING DEFI- NITIONS SHALL APPLY: (A) "EXCESS FEDERAL GROSS INCOME" MEANS THE AMOUNT OF FEDERAL GROSS INCOME FROM ALL SOURCES FOR THE TAXABLE YEAR REDUCED BY THE SUM (NOT TO EXCEED THIRTY THOUSAND DOLLARS, OF THOSE ITEMS INCLUDED IN FEDERAL GROSS INCOME WHICH CONSIST OF: (I) EARNED INCOME, (II) PENSION PAYMENTS, INCLUDING SOCIAL SECURITY PAYMENTS, (III) INTEREST, AND (IV) DIVIDENDS. (B) FOR PURPOSES OF THIS PARAGRAPH, THE TERM "EARNED INCOME" SHALL MEAN WAGES, SALARIES, TIPS AND OTHER EMPLOYEE COMPENSATION, AND THOSE ITEMS OF GROSS INCOME WHICH ARE INCLUDIBLE IN THE COMPUTATION OF NET EARNINGS FROM SELF-EMPLOYMENT. FOR THE PURPOSES OF THIS PARAGRAPH, PAYMENTS FROM THE STATE'S FARMLAND PROTECTION PROGRAM, ADMINISTERED BY THE DEPARTMENT OF AGRICULTURE AND MARKETS, SHALL BE INCLUDED AS FEDERAL GROSS INCOME FROM FARMING. (3) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. S 3. This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2015.