Applications are now being accepted for a tax credit program intended to support Pennsylvania’s agriculture industry by helping new farmers get established, according to Senator Elder Vogel, who authored the legislation that created the initiative.
The Beginning Farmer Tax Credit Program created by Senator Vogel’s measure, Senate Bill 478 , provides an incentive to landowners who lease or sell their land, buildings and equipment to beginning farmers. Landowners will receive a one-time personal income tax credit for the sale or a multi-year lease of property. The legislation requires all leases be enforced through written agreements and that the sale of property be for fair market value in order to qualify for the tax credit.
“The facts clearly show the ‘graying’ of Pennsylvania’s farming industry. That is an issue that we need to quickly address as a state. I have heard throughout the state that the top hurdle facing new farmers is finding affordable farmland,” said Senator Vogel, who serves as Chairman of the Senate Agriculture & Rural Affairs Committee and operates a family farm in Beaver County.
“The tax credits provided under this new program will reward landowners who help new farmers get started,” Senator Vogel added. “None of our neighboring states offer a similar tax credit program, so this is a great way to show the agriculture community that Pennsylvania is open for business.”
The Department of Community and Economic Development (DCED) , in coordination with the Departments of Agriculture and Revenue, will allocate up to $5 million in tax year 2020, and up to $6 million annually through the 2030 tax year, for credits of five percent of the lesser of the sale price of fair market value of the agricultural asset, up to $32,000; or 10 percent of the gross rental income of the first, second and third year of the rental agreement, up to $7,000 per year.
Beginning farmers must meet eligibility criteria. Applications for certification, which are evaluated by the Department of Agriculture, can be found on the department’s website, agriculture.pa.gov.
For every farmer under the age of 35 in Pennsylvania there are four farmers over the age of 65. Of the 7.7 million acres of farmland across Pennsylvania, 41 percent is managed by a farmer 55 years of age or older and 11 percent of that land is expected to transfer in the next five years.
“Those statistics highlight the challenges that new farmers face when looking to start a farm of their own,” said Senator Vogel. “A lot of people are talking about the crisis in the dairy industry and agriculture. This tax credit program provides a solution that will incentivize a new generation of farmers.”
CONTACT: Matt Parido firstname.lastname@example.org