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. The credit is applicable for tax years starting January 1, 2025, and includes specific percentages of the sale price or rental income, with maximum limits set for each type of transaction. For instance, a 5% credit on the sale of agricultural assets is capped at $32,000, while rental agreements can yield credits of up to $7,000 or $10,000 per year depending on the type of agreement. Taxpayers must obtain a certificate from the relevant department to claim the credit, which is limited to a total of $5 million per calendar year.

Additionally, the bill outlines the criteria for defining "beginning farmers" and establishes reporting requirements for the department to assess the effectiveness of the credit program. The definition of a beginning farmer includes residency, a net worth cap of $800,000, and specific farming experience. The bill also mandates annual reports detailing the number and amount of credits issued, the geographic distribution of credits, and the impact on beginning farmers. Overall, the legislation aims to support new entrants into farming by providing financial incentives for established agricultural asset owners to engage with them.

Statutes affected:
Senate Introduced Bill: 206.1, 206.847