This bill creates a tax credit to assist the next generation of farmers while helping the current generation transition their operations.Read More
A few years ago, a group of leaders with the Young Agricultural Professionals program proposed an idea for Ohio Farm Bureau’s state policy development committee to consider. They wanted to create an incentive for established farm owners to transition their operations to beginning farmers. Soon after becoming official Farm Bureau state policy, OFBF’s team went to work with State Rep. Susan Manchester to craft legislation. After a few years of research, hearings, negotiations and frustrating delays, Gov. Mike DeWine signed HB 95 into law April 21.
This bill creates a tax credit to assist the next generation of farmers while helping the current generation transition their operations.
“The idea for HB 95 all started because younger Ohio Farm Bureau members who were working their way into agriculture and more experienced members looking to step away from the industry were facing many obstacles when it came to working on a transition plan,” said Adam Sharp, Ohio Farm Bureau executive vice president. “Through their recommendations, our organization worked through the policy development process to successfully add incentives for new and beginning farmers to the list of important issues Farm Bureau advocates for every day. Those grassroots efforts have now come to fruition with the passage of this legislation.”
Rep. Manchester (R-Waynesfield) was a co-sponsor of the legislation and has championed it since 2019. Several Farm Bureau members have testified in favor of the bill over the last several years, including Union County Farm Bureau member Ryan Conklin, Pickaway County Farm Bureau members Bennett and Liza Musselman, Ohio Farm Bureau Northwest Regional State Trustee Rose Hartschuh from Crawford County, and District 20 State Board Trustee Nathan Brown from Highland County.
HB 95 establishes an income tax credit for beginning farmers who participate in a financial management program, administered by the Ohio Department of Agriculture. The bill also states that established landowners and ag producers can receive a state income tax credit when they sell or rent land or agricultural assets like machinery, building facilities or livestock to a beginning farmer.
While beginning farmers also can receive a tax credit for taking a qualified financial management course, they do not receive tax credits for buying land or other farm-related items.
What is in the bill
Under HB 95, established landowners and ag producers can receive a state income tax credit when they sell or rent land or agricultural assets like machinery, building facilities or livestock to a beginning farmer. Beginning farmers also can receive a tax credit for taking a qualified financial management course, but do not receive tax credits for buying land or other farm-related items.
A beginning farmer is defined as someone who:
- Intends to farm in Ohio, or has been farming in Ohio for less than 10 years.
- Has a household net worth of less than $800,000. This limit applies to 2021 and will be adjusted for inflation in future years.
- Provides the majority of the day-to-day labor and management of the farm.
- Has adequate farming experience or demonstrates adequate knowledge about farming.
- Submits projected earnings statements and demonstrates a profit potential.
- Demonstrates that farming will be a significant source of the individual’s income.
- Participates in a financial management program approved by the Ohio Department of Agriculture.
- Meets additional requirements set by the Ohio Department of Agriculture.
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