Tax breaks could come to new, existing Ohio farmers
(The Center Square) – Farming groups around Ohio are backing a bill that could pay millions to aspiring farmers in the state.
House Bill 95, if passed, would provide tax credits to beginning farmers participating in a financial management program run by the state. Tax credits would also go to those who aid new farmers by providing land or equipment.
To qualify, a farmer has to either been farming in Ohio for fewer than 10 years, or be a newcomer with the intention of farming in Ohio. The farmer must then attend a financial management program and. once completed, can apply for an income tax credit for the cost of the program.
Other Ohio farmers stand to benefit as well. Farmers who sell or lease buildings, land, livestock or machinery to new farmers can apply for tax credits – up to 5% on what is sold, and 10% of the amount leased. In the case of land, the area must total at least 10 acres and produce at least $2,500 annually.
State Reps. Susan Manchester, R-Waynesfield, and Mary Lightbody, D-Westerville, co-sponsored the bill. Manchester co-sponsored a similar bill two years ago. This year’s version does not include a provision prohibiting the selling or renting of equipment among family members.
“The average age of the U.S. farmer is currently 58,” Manchester said. “This legislation recognizes the need to help the next generation of farmers get started in a very capital-intensive industry.”
The bill caps the cost to the state at $10 million; the previous version of the bill did not have a cap. Most of the money would come from the General Reserve Fund, with about 1.67% coming out of the Local Government Fund and the Public Library Fund. Manchester noted a similar bill in Minnesota in 2017 has thus far cost the state $1.4 million in tax revenue.
Farming leaders recently offered their support before the House Agriculture and Conservation Committee. Members of the Ohio Farm Bureau Federation, the Ohio Corn and Wheat Growers Association and the Ohio Soybean Association were among those either in attendance or issuing statements of support during the bill’s second reading.
“This tax credit lays the foundation for critically important skills such as financial planning that will provide qualified growers the tools to remain economically sustainable as they embark on their career,” OCWGA Executive Director Tadd Nicholson said. “A temporary, limited tax credit linked to such requirements is a commonsense solution.”
Others emphasized the need to keep the farming population diverse.
“If a landowner wants to sell or lease ground to an area farmer, he or she is more likely to sell to a large established farmer because that person can offer better financial terms,” Ohio Farm Bureau representative Ryan Conklin told the committee. “By offering the landowner a tax incentive to sell to a beginning farmer, this bill would help level the playing field during the bidding process.”
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