HF1626

HF1626 (Legislative Session 94 (2025-2026))

Agricultural asset available credit amount cap eliminated.

Related bill: SF1419

AI Generated Summary

This bill proposes changes to Minnesota's tax code by eliminating the cap on the available tax credit for owners of agricultural assets who sell or lease their property to beginning farmers. Key provisions include:

Tax Credit for Sales and Rentals:
- Owners of agricultural assets can claim a tax credit based on the sale or rental of assets to beginning farmers.
- The credit may equal:
- 8% of the lesser of the sale price or market value of the asset (previously capped at $50,000).
- 10% of the gross rental income annually for three years under a rental agreement (previously capped at $7,000 per year).
- 15% of the cash equivalent of gross rental income for three years under a share rent agreement (previously capped at $10,000 per year).
- The new provision removes the previous maximum caps on these credit amounts.
Eligibility & Approval:
- The credit is available only with certification from the appropriate authority.
- Rental agreements must follow prevailing community rates.
- If an agreement is terminated without fault of the asset owner, the tax credits remain valid.
Special Provisions:
- The bill allows sales to family members to qualify for the credit if the sale price is at least the assessed value of the land.
- For sales to "emerging farmers," the credit increases from 8% to 12%.

This amendment aims to encourage more agricultural asset transfers to new and emerging farmers by expanding tax incentives.

Bill text versions

Introduction PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 26, 2025	House	Floor	Action	Introduction and first reading, referred to	Taxes
February 26, 2025	House	Floor	Action	Introduction and first reading, referred to	Taxes

Citations

[
  {
    "analysis": {
      "added": [
        "Twelve percent credit for sale to emerging farmers.",
        "Exclusion changes for family member sales to match or exceed assessed value."
      ],
      "removed": [],
      "summary": "This bill modifies the tax credit available for owners of agricultural assets under section 41B.0391 subdivision 2.",
      "modified": [
        "Maintains credit terms for owners based on percentage of sale price or rental income."
      ]
    },
    "citation": "41B.0391",
    "subdivision": "subdivision 2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "This amendment updates approval and certification processes for tax credits under section 41B.0391 subdivision 4.",
      "modified": [
        "Revises procedure for tax credit claims post-approval by the authority."
      ]
    },
    "citation": "41B.0391",
    "subdivision": "subdivision 4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Amendments to section 290.06 subdivision 37 adjust tax liability computation for credits under section 41B.0391.",
      "modified": [
        "Clarifies application of the agricultural asset credit against overall tax liability."
      ]
    },
    "citation": "290.06",
    "subdivision": "subdivision 37"
  }
]