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S.F. No. 933 - Beginning Farmer Tax Credits
Author: Senator Lyle Koenen
Prepared By: Greg Knopff, Senate Analyst (651/296-9399)
Date: March 3, 2015


 Section 1 [Beginning farmer tax credits]

            Subd. 1 [Definitions] defines “agricultural assets," “farm,” “farm product,” “farming or livestock production,” “owner of agricultural assets,” “beginning farmer or livestock producer,” and “share rent agreement” for the purposes of the credit created in this section.  The definition of “beginning farmer or livestock producer” provides the basic eligibility for the program.  The definition includes the requirement that the person will begin or has begun farming or livestock production within the last two years and that the person does not have a net worth greater than $200,000.

            Subd. 2 [Tax credit for owners of agricultural assets] allows an owner of agricultural assets to take a credit on income taxes for sales or rental of the assets to a beginning farmer or livestock producer.  The credit is:  (1) five percent of the sale price; (2) ten percent of the gross rental income; or (3) 15 percent of cash equivalent gross rental income from the first three years of a share rent agreement.  This subdivision also provides for renting at prevailing community rates, termination of a rental agreement, and limitations on credit based on the tax liability.

            Subd. 3 [Beginning farmer management tax credit] allows a beginning farmer or livestock producer a credit on income tax of up to $500 for the total cost of a financial management program.  The credit is available for up to three years and is limited to the person’s tax liability.

            Subd. 4 [RFA duties] provides the duties of the Rural Finance Authority (RFA) under this section to:

            (1) approve and certify beginning farmer or livestock producer eligibility for the tax credits under this section;

            (2) approve and certify owners of agricultural assets as eligible for the tax credits under this section;

            (3) provide assistance to beginning farmers or livestock producers for qualification and participation in the tax credit program; and

            (4) refer beginning farmers or livestock producers as necessary to additional information.

Sections 2 and 3 [Income tax laws] add the specific credits provided in Section 1 to the income tax law.

Section 4 [Effective Date] makes sections 1 to 3 effective for taxable years after December 31, 2014.


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