Missouri Senate

Introduced

BEGINNING FARMER TAX CREDITS (Sections 135.1000-135.1015) - This act creates two new tax credit programs to assist beginning farmers. To qualify as a beginning farmer, a person shall be a Missouri resident, have not operated a farm or ranch for more than 10 years, nor own a farm or ranch greater than 30% of the average size farm in the county as determined by the most current Census of Agriculture, and materially participate in the farming or ranching operation.

The agricultural assets transfer agreement tax credit authorizes owners of agricultural assets to be issued an income tax credit for leasing their agricultural land, property, crops, or livestock to beginning farmers. The taxpayer must enter into a written agreement with a beginning farmer for a duration of at least ten years. For agreements based on a cash basis, the tax credit will be equal to 7% of the gross amount paid under the agreement each tax year. For agreements based on a commodity share basis, the tax credit will be equal to 17% of the amount paid to the taxpayer from crops or livestock sold under the agreement.

The custom farming contract tax credit authorizes taxpayers that hire beginning farmers under a custom farming contract to be issued an income tax credit. The contract must provide for production of crops or livestock principally located on the taxpayer's land in exchange for a set fee or rate. The contract must be in writing, for a term of no more than a year, and for a total payment of at least $1,000. The tax credit will be equal to 7% of the gross amount paid to the beginning farmer.

No taxpayer may be issued a tax credit in excess of $50,000 under each program in a given tax year. The total amount of tax credits that may be issued under both programs in a fiscal year is $12 million, with $8 million allocated for the agricultural assets transfer tax credit and $4 million allocated for the custom farming contract tax credit. The tax credits are not refundable or transferable, and may not be carried back to any previous tax year but may be carried forward for up to 5 tax years. If a taxpayer is at fault for terminating an agricultural assets transfer agreement or a custom farming contract, the taxpayer shall pay back the amount of any tax credits claimed under the program.

SALE OF AGRICULTURAL OR HORTICULTURE PROPERTY TAX DEDUCTION (Section 143.2005) - This act creates an individual tax deduction equal to 50% of the income realized from the sale of agricultural or horticultural property sold to a beginning farmer, to the extent that such amount is included in federal adjusted gross income when determining such individual's Missouri adjusted gross income. If the agricultural or horticultural property ceases to be classified as such within 10 years of being sold, the taxpayer shall include the amount of the deduction previously received as income.

BEGINNING FARMER CENTER (Section 262.599) - This act establishes a Beginning Farmer Center as part of the University of Missouri extension program to assist individuals in beginning farming operations. On or before January 1 of each year, the Beginning Farmer Center shall submit a report to the General Assembly that includes recommendations for methods by which more individuals may be encouraged to enter agriculture.

KAYLA CRIDER