The proposed bill amends the Income Tax Act of 1967 by adding a new section that allows taxpayers who own agricultural assets to claim a tax credit for selling or renting these assets to beginning farmers. Effective for tax years starting January 1, 2025, the credit is structured as follows: 5% of the sale price or fair market value of the agricultural asset (up to $32,000) for sales; 10% of gross rental income (up to $7,000 per year) for qualified rental agreements; and 15% of the cash equivalent of gross rental income (up to $10,000 per year) for share rent agreements. Taxpayers must obtain a certificate from the relevant department to claim the credit, which is capped at $5 million per calendar year.

Additionally, the bill outlines specific requirements for both the taxpayer and the beginning farmer, including definitions of agricultural assets and the criteria for qualifying as a beginning farmer. The bill mandates annual reporting on the effectiveness of the credit, detailing the number of credits issued, their geographic distribution, and the impact on beginning farmers. The credit cannot exceed the taxpayer's tax liability for the year, but any excess can be carried forward for up to five years.

Statutes affected:
Senate Introduced Bill: 206.1, 206.847