Farmers tax credits start available in 2023

b Ryan Conklin

Starting January 1, Ohio farmers can pursue the state income tax authorized by House Bill 95.

The state Start the Farmers Tax Credit now available to those just entering the field and those helping the beginning farmers.

It was signed by Gov. Mike DeWine in the law on April 21, the credits are designed to promote the sale or lease of agricultural assets to the beginning farmers. Rep. Susan Manchester, R-Waynesfield, and Rep. Mary Lightbody, D-Westerville, sponsored and supported the bill through the General Assembly.

Earlier this year, the Ohio Department of Agriculture announced special conditions for beginning farmers and property owners. According to the bill’s requirements, Ohioans looking to complete farm sales or leases this year should review the ODA guidelines and consider applying them to future transactions. Beginning farmers and owners of agricultural assets are eligible for benefits other than taxes.

To qualify, a beginning farmer is one who:

  • intending to enter or have entered agriculture within the last 10 years

  • farm or intend to farm land in Ohio

  • is not a partner, agent, shareholder or trustee of the asset the person is seeking to buy or rent

  • has a net worth of less than $800,000, including spouse and dependent assets, as determined by annual inflation each.

  • it provides a lot of daily physical work and farm management

  • sufficient agricultural knowledge or knowledge of the type of agriculture for which assistance is sought

  • provide information on projected income and demonstrate potential income

  • showing that agriculture will be an important source of income for the people

  • participate in an ODA-approved financial management program

Beginning farmers should consider qualifying for the program as soon as possible. Doing so may improve competition in the retail or rental market for 2023 and beyond.

In addition, the department compiled a list of approved financial management subjects that must be completed to ensure eligibility. Although the tax credit for the beginning farmer is limited to the cost of the financial program, the real goal is to achieve competition in the markets of land, livestock and equipment.

Agricultural asset owners who sell or lease land, livestock, machinery or buildings are all eligible for the 3.99% tax. The credit application period may vary depending on the time of purchase or the type of lease contract. For land to be eligible for the credit, it must meet Ohio’s current agricultural performance requirements. Equipment vendors are prohibited from participating in the program.

In addition, beginning farmers and asset owners must complete and submit forms to the ODA. Those forms verify eligibility for credit and must be completed properly. Remember, the forms and accompanying documents must be submitted to ODA before October 3rd of the current fiscal year to claim. eat the debt.

Remember, transactions that occurred in fiscal year 2022 are not eligible for these tax benefits. To determine the applicability of House Bill 95 to a particular sale or lease, consult your attorney or tax professional. before entering into any contract. As always, a written sales contract or rental instrument is highly recommended.

For more information about tax permits and requirements, visit the Ohio Department of Agriculture website.

Conklin is an attorney and owner of Wright & Moore Law Co. LPA in Ohio. Reach out to him c (protected mail) or 740-990-0755.

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