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REAP tax benefits with conservation BMPs in Pennsylvania

Apply for REAP tax credits of up to $150,000 and match cost-sharing via Pennsylvania's farm conservation tax credit program by April 22.

March 29, 2016

3 Min Read

Time’s running out for Pennsylvania farmers who want capture to 2015-16 Resource Enhancement and Protection program tax credits for best management practices or on-farm conservation equipment. The deadline for applying for the REAP tax credit is April 22.

REAP is a tax credit program for producers who install BMPs or make equipment purchases that reduce erosion and stream sedimentation. Administered by the State Conservation Commission, it’s an extra incentive for purchasing conservation equipment and materials to better protect the environment.

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How it works
You can receive tax credits of up to $150,000 per ag operation for 50% to 75% of project cost. The most common projects approved are for no-till planting and precision ag equipment, waste storage facilities, Conservation Plans, Nutrient Management Plans and protecting heavy animal use areas like barnyards. REAP can be used in conjunction with other funding sources such as the Environmental Quality Incentive Program or the Chesapeake Bay Program.

Since the program began in 2007, REAP has awarded tax credits to 3,900 projects totaling more than $50 million. Public and private enterprises investments in REAP have contributed to the conservation projects, worth more than $128 million.

From 2010 to 2014, REAP has helped reduce an estimated runoff of nearly 1.4 million pounds of nitrogen, 84,000 pounds of phosphorus and 9,000 tons of sediment.

Private investors may act as a sponsor by providing capital to producers as a project is approved in return for tax credits. Any individual or business subject to taxation through Personal Income Tax, Corporate Net Income Tax, Bank Shares Tax or others is eligible to participate in REAP.

Applications for the 2015-2016 REAP program area available at www.agriculture.pa.gov by clicking “protect,” then “State Conservation Commission,” then “REAP,” or by contacting Joel Semke at 717-705-4032 or [email protected].

More must be done
With the 2017 mid-point assessment for our Chesapeake Bay Watershed Implementation Plan in our view, agriculture is expected to make 75% of Pennsylvania’s total nutrient load reductions, “in large part because we show the greatest opportunity for achieving restoration of the bay,” says Ag Secretary Russell Redding. “I encourage farmers to take advantage of the funding REAP provides to help continue making conservation-minded capital improvements.

Despite current progress, achievements to meet water quality expectations have been deemed insufficient by the U.S. Environmental Protection Agency. See Chesapeake Bay challenges and solutions.

Earlier this year, a comprehensive strategy to restore the health of the Chesapeake Bay was unveiled. That strategy focuses on:

* Putting high-impact, low-cost BMPs on the ground, and quantify undocumented BMPs in watersheds impaired by agriculture or stormwater

* Improving reporting, record keeping and data systems to provide better and more accessible documentation

* Addressing nutrient reduction by meeting EPA’s goal of inspecting 10% of farms in the watershed, ensuring development and use of manure management and agricultural erosion and sediment control plans, and enforcement for non-compliance

* Identifying legislative, programmatic or regulatory changes to provide the additional tools and resources necessary to meet federal pollution reduction goals by 2025

* Obtaining additional resources for water quality improvement

* Establishing a Chesapeake Bay Office to coordinate the development, implementation and funding of the commonwealth’s Chesapeake Bay efforts, and when necessary – stronger enforcement and compliance measures.

For more information about Pennsylvania’s Chesapeake Bay strategy, click here

You’re also encouraged to participate in a BMP survey now underway by Penn State Extension to help show what agriculture is already doing to protect water quality. Access the survey at Help tell the story Pa farmer survey.

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