KY: State Launches Selling Farmers Tax Credit Program
25 Nov, 2019
Kentucky launched a new program offering farmers incentives for selling their property to beginning farmers, an effort to further sustain one of the state’s most important industries.
Gov. Matt Bevin and partner organizations announced the Kentucky Selling Farmer Tax Credit (KSFTC) program, which will begin accepting applications Monday, Dec. 16.
“Farmers are a vital part of Kentucky’s economy, and this new program will help ensure our state benefits from its bountiful supply of agricultural land to the fullest extent possible,” Gov. Bevin said. “We are thankful for all who partnered in creating the KSFTC program, and we encourage selling farmers to take advantage of this exciting new opportunity.”
Eligible selling farmers could receive tax credits up to 5% of the purchase price of qualifying assets, with a $25,000 cap per calendar year and a $100,000 lifetime cap.
“The Kentucky Selling Farmer Tax Credit program is an innovative way to incentivize those farmers who are interested in selling their farmland to sell to new or beginning farmers,” Kentucky Agriculture Commissioner Ryan Quarles said. “The average age of a farmer in Kentucky is about the age of retirement. We need to continue incentivizing agriculture as a career path so that Kentucky can maintain its reputation as a top-notch agricultural state.”
Both the selling and acquiring parties must meet the following criteria for beginning and selling farmers:
•A beginning farmer cannot have previously owned any agricultural land for a period exceeding 10 years. In addition, beginning farmers must commit to managing and operating a for-profit farming business a minimum of five years after purchasing eligible agricultural land.
•Selling farmers cannot have more than 50 full-time employees and must be the legal owner of agricultural land and assets sold to a beginning farmer. Sales involving immediate family members do not qualify for tax credit consideration.
Before completing a sale of agricultural assets, applicants should review the Kentucky Selling Farmer Tax Credit Guidelines for more detailed program information and eligibility requirements. After completing a sale, both the beginning farmer and selling farmer must submit applications to determine tax credit eligibility.
A number of partners were instrumental in KSFTC’s development. This collaborative effort included essential contributions from the Governor’s Office of Agricultural Policy, Kentucky Department of Agriculture, state legislators, Kentucky Farm Bureau, Farm Credit Mid-America and Kentucky Agricultural Development Board.
Mark Haney, Kentucky Farm Bureau president, said the program offers promise for beginning farmers needing access to agricultural land.
“Preserving our farmland is so critically important to the viability of Kentucky agriculture,” Haney said. “Access to land is one of the biggest challenges facing our young farmers. We are hopeful the Kentucky Selling Farmer Tax Credit program will assist us in keeping Kentucky agriculture the strong economic engine it is for generations to come.”
Sen. David Givens, of Greensburg, said KSFTC will help support rural Kentucky.
“I was proud to aid in this effort to keep Kentucky farmland active in agricultural production,” Sen. Givens said. “By assisting young farmers in acquiring land through tax breaks for the selling family, we continue to strengthen our rural communities.”
Rep. Bart Rowland, of Tompkinsville, said KSFTC will help give beginning farmers the jumpstart they need.
“This program is without a doubt a win-win for our commonwealth,” Rep. Rowland said. “It keeps farmland in production and allows a new generation of farmers to get their foot in the door. Farming is not only a way of life, but a way to improve the quality of life for our communities.”
While this program provides tax credits to selling farmers, other state agricultural programs, such as the Kentucky Agricultural Finance Corporation’s Beginning Farmer Loan Program, are available to assist beginning farmers.
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