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 for qualified rental agreements (up to $7,000 per year for three years); and 15% of the cash equivalent of gross rental income for share rent agreements (up to $10,000 per year for three years). 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 the requirements for beginning farmers, including residency, net worth limitations, and farming experience. It mandates annual reporting on the effectiveness of the credit program, detailing the number of credits issued, geographic distribution, and the impact on beginning farmers. The bill also specifies definitions for key terms such as "agricultural assets," "qualified rental agreement," and "share rent agreement," ensuring clarity in the implementation of the tax credit.

Statutes affected:
Senate Introduced Bill: 206.1, 206.847