January 19, 2018
After more than 10 years of effort, the Beginning Farmer Tax Credit has finally become law in Minnesota.
This first-in-the-country law went into effect Jan. 1 and provides a tax benefit for individuals who sell or rent their farmland to a beginning farmer.
The Central Minnesota Young Farmers Coalition is celebrating the effort at 5:30 p.m. Jan. 25 at Bad Weather Brewing Co. in St. Paul, Minn.
The coalition has gathered several state and federal officials to celebrate this historic law, including Rep. Tom Emmer; Cynthia Bauerly, Minnesota Department of Revenue commissioner; Matthew Wohlman, Minnesota Department of Agriculture deputy commissioner; state Reps. Nels Pierson, Jeanne Poppe and Rod Hamilton; state Sen. Mike Goggins; and gubernatorial candidate Erin Murphy. These officials will each speak briefly on the evening of the event.
“Passing this historic law was only the first step,” says Matthew Fitzgerald, a coalition member and a grain farmer from Glencoe, Minn. “The real work is to now get the word out and help the next generation of Minnesota farmers.”
Interested individuals should register online to RSVP through Saturday (Jan. 20) for the celebration of the Beginning Farmer Tax Credit’s passage into law.
The coalition says the bill, which had bipartisan support, saw efforts by major agricultural groups in the state, including Minnesota Farm Bureau, Minnesota Farmers Union, the Land Stewardship Project and the Minnesota Catholic Conference.
Rachel Brann, a beginning cut-flower farmer from Milaca, Minn., summarized the significance of the bill.
“By gathering such a large group of supporters, Minnesota is making a serious commitment to the next generation of farmers and food entrepreneurs,” she says. “This is a hopeful step for agriculture and practical lawmaking.”
The law provides tax credits for the rent or sale of farm land or a variety of farm assets to beginning farmers. While similar to tax credits in Iowa or Nebraska, Minnesota is the first state to provide incentives for the sale of farmland.
To participate, a beginning farmer will need to be enrolled in an approved financial management program.
The agricultural asset owner participating under the law can claim credits in one of three categories:
• 5% of the lesser of the sale price or fair market value of the ag asset, up to a maximum of $32,000
• 10% of the gross rental income of each of the first, second and third years of the rental agreement, up to a maximum of $7,000 per year
• 15% of the cash equivalent of the gross rental income of each of the first, second and third years of a share-rent agreement, up to a maximum of $10,000 per year
The Rural Finance Authority will administer the tax credits by certifying beginning farmers and owners of ag assets. The initiative is first-come, first-served, with a maximum amount of $5 million available in 2018.
Founded in 2016, the Central Minnesota Young Farmers Coalition is a membership organization of farmers from Benton, Grant, Sterns, Meeker, Milaca, McLeod, Wright, Carver and Rice counties. This local chapter of the National Young Farmers Coalition meets regularly to socialize, network and advocate for young and beginning farmers.
Editor’s note: Learn more about the coalition and its efforts to pass the legislation in The Farmer’s June 23, 2017, article, Beginning farmers excited about new farm tax credit legislation in Minnesota.
Source: Central Minnesota Young Farmers Coalition
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