Add §45, amd §§210-B & 606, Tax L; amd §16, Ag & Mkts L
Provides a tax credit for sales or rentals of agricultural assets to beginning farmers; requires the commissioner of agriculture and markets to implement a plan for certification of eligible taxpayers with respect thereto.
STATE OF NEW YORK
________________________________________________________________________
8452
2021-2022 Regular Sessions
IN ASSEMBLY
November 17, 2021
___________
Introduced by M. of A. LUPARDO -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, in relation to providing a tax credit for
sales or rentals of agricultural assets to beginning farmers; and to
amend the agriculture and markets law, in relation to establishing
duties of the commissioner of agriculture and markets with respect
thereto
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "New York
2 farmland preservation act".
3 § 2. The tax law is amended by adding a new section 45 to read as
4 follows:
5 § 45. Credit for owners of agricultural assets. (a) General. A taxpay-
6 er that has been certified by the commissioner of agriculture and
7 markets as a certified owner of agricultural assets shall be eligible
8 for a credit against the tax imposed under article nine-A or twenty-two
9 of this chapter, pursuant to the provisions referenced in this section.
10 (b) Definitions. For purposes of this section, the following terms
11 shall have the following meanings:
12 (1) "Agricultural assets" shall mean agricultural land, livestock,
13 facilities, buildings, or machinery used for farming.
14 (2) "Beginning farmer" means a resident of New York who:
15 (i) is seeking entry, or has entered within the last ten years, into
16 farming;
17 (ii) intends to farm land located within the state borders of New
18 York;
19 (iii) is not related by blood or marriage to the owner of the agricul-
20 tural assets from whom the beginning farmer is seeking to purchase or
21 rent agricultural assets;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08317-03-1
A. 8452 2
1 (iv) is not related by blood or marriage to a partner, member, share-
2 holder, or trustee of the owner of agricultural assets from whom the
3 beginning farmer is seeking to purchase or rent agricultural assets;
4 (v) intends to provide the majority of the day-to-day physical labor
5 or management of the farm; and
6 (vi) meets the eligibility requirements for certification as a begin-
7 ning farmer as determined by the commissioner of agriculture and
8 markets.
9 (3) "Socially disadvantaged beginning farmer" means a farmer who is a
10 member of a socially disadvantaged group and meets the definition of
11 beginning farmer as defined in section twelve hundred eighty-five-r of
12 the public authorities law.
13 (4) "Socially disadvantaged group" means a group whose members have
14 been subjected to racial, ethnic, or gender prejudice because of their
15 identity as members of a group without regard to their individual quali-
16 ties. These groups include all of the following:
17 (i) African Americans;
18 (ii) Native Indians;
19 (iii) Alaskan Natives;
20 (iv) Hispanics;
21 (v) Asian Americans; and,
22 (vi) Native Hawaiians and Pacific Islanders.
23 (5) "Farm product" shall have the same meaning as crops, livestock and
24 livestock products as defined in subdivision two of section three
25 hundred one of the agriculture and markets law.
26 (6) "Farming" means the active use, management, and operation of real
27 and personal property for the production of a farm product.
28 (7) "Owner of agricultural assets" means an individual, trust, part-
29 nership, or business entity that:
30 (i) is the owner in fee of agricultural land or has legal title to any
31 other agricultural asset;
32 (ii) is a New York State resident;
33 (iii) derived at least fifty percent of the individual's, trust's,
34 partnership's or business entity's gross income from farming in at least
35 five of the preceding fifteen years; and
36 (iv) provided the majority of the day-to-day physical labor and
37 management of a farm in at least five of the preceding fifteen years.
38 If the owner is a partnership or business entity, the requirements
39 outlined in subparagraphs (i), (ii), (iii) and (iv) of this paragraph
40 shall be satisfied if any partner or shareowner, or any combination of
41 the two, meet the requirements of this paragraph.
42 (8) "Rental agreement" means a rental agreement in which the principal
43 consideration given to the owner of agricultural assets is a predeter-
44 mined portion of the production of farm products produced from the rent-
45 ed agricultural assets and which provides for sharing production costs
46 or risk of loss, or both.
47 (c) Computation of credit. (1) An owner of agricultural assets may
48 take a credit for the sale or rental of agricultural assets to a begin-
49 ning farmer. The credit shall be equal to the greater of:
50 (i) five percent of the sale price of the agricultural asset;
51 (ii) ten percent of the gross rental income in each of the first,
52 second, and third years of a rental agreement; or
53 (iii) fifteen percent of the cash equivalent of the gross rental
54 income in each of the first, second, and third years of a rental agree-
55 ment.
A. 8452 3
1 (2) An owner of agricultural assets may take an additional credit for
2 the sale or rental of agricultural assets to a socially disadvantaged
3 beginning farmer. The additional credit shall be the credit applied
4 under paragraph one of this subdivision plus an additional two and one-
5 half percent.
6 (3) A qualifying rental agreement includes cash rent of agricultural
7 assets or a rental agreement. The agricultural asset must be rented at
8 prevailing community rates as determined by the commissioner of agricul-
9 ture. The credit may be claimed only after approval and certification by
10 the commissioner of agriculture and markets.
11 (4) An owner of agricultural assets or beginning farmer may terminate
12 a rental agreement, including a rental agreement, for reasonable cause.
13 Within fifteen days, the owner of agricultural assets must notify the
14 commissioner of agriculture in writing of such termination. If a rental
15 agreement is terminated without the fault of the owner of agricultural
16 assets, the tax credits shall not be retroactively disallowed. If an
17 agreement is terminated with fault by the owner of agricultural assets,
18 any prior tax credits claimed under this subdivision by the owner of
19 agricultural assets shall be disallowed and must be repaid to the
20 commissioner of taxation and finance.
21 (d) Cross-references. For application of the credit provided for in
22 this section, see the following provisions of this chapter:
23 (1) article 9-A: section 210-B: subdivision 55.
24 (2) article 22: section 606: subsections (i) and (nnn).
25 § 3. Section 210-B of the tax law is amended by adding a new subdivi-
26 sion 55 to read as follows:
27 55. Tax credit for owners of agricultural assets. (a) Allowance of
28 credit. A taxpayer shall be allowed a credit, to be computed as provided
29 in section forty-five of this chapter, against the tax imposed by this
30 article.
31 (b) Application of credit. The credit allowed under this subdivision
32 for any taxable year may not reduce the tax due for such year to less
33 than the amount prescribed in paragraph (d) of subdivision one of
34 section two hundred ten of this article. However, if the amount of cred-
35 it allowed under this subdivision for any taxable year reduces the tax
36 to such amount or if the taxpayer otherwise pays tax based on the fixed
37 dollar minimum amount, any amount of credit thus not deductible in such
38 taxable year will be treated as an overpayment of tax to be credited or
39 refunded in accordance with the provisions of section one thousand
40 eighty-six of this chapter. Provided, however, the provisions of
41 subsection (c) of section one thousand eighty-eight of this chapter
42 notwithstanding, no interest will be paid thereon.
43 § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
44 of the tax law is amended by adding a new clause (xlvi) to read as
45 follows:
46 (xlvi) Credit for owners ofAmount of credit under
47 agricultural assets undersubdivision fifty-five of
48 subsection (nnn)section two hundred ten-B
49 § 5. Section 606 of the tax law is amended by adding a new subsection
50 (nnn) to read as follows:
51 (nnn) Credit for owners of agricultural assets. (1) A taxpayer shall
52 be allowed a credit, to be computed as provided in section forty-five of
53 this chapter, against the tax imposed by this article.
54 (2) Application of credit. If the amount of credit allowed under this
55 subsection for any taxable year exceeds the taxpayer's tax for such
56 year, the excess will be treated as an overpayment of tax to be credited
A. 8452 4
1 or refunded in accordance with the provision of section six hundred
2 eighty-six of this article, provided, however, that no interest will be
3 paid thereon.
4 § 6. Section 16 of the agriculture and markets law is amended by
5 adding a new subdivision 52 to read as follows:
6 52. (a) Establish a program for initial certification of owners of
7 agricultural assets and beginning farmers for purposes of eligibility
8 for a tax credit pursuant to section forty-five of the tax law.
9 (b) Adopt, promulgate and implement rules, regulations and orders with
10 respect to application for certification, continued qualification for
11 certification and termination of certification of owners of agricultural
12 assets and/or beginning farmers for purposes of eligibility for such tax
13 credit.
14 (c) Certify rental agreements entered into by certified owners of
15 agricultural assets and beginning farmers are fair and at rates equal to
16 the market value of the farm product as provided in section forty-five
17 of the tax law; provided that agricultural assets must be rented at
18 prevailing community rates as determined by the commissioner.
19 (d) Notify the commissioner of taxation and finance of all approved
20 applications and all applications for which certification was subse-
21 quently terminated by the commissioner.
22 § 7. This act shall take effect immediately and shall apply to taxable
23 years beginning on or after January 1, 2023.
