ST. PAUL – State Rep. Dean Urdahl, R-Acton Township, reminds beginning farmers Nov. 1 is the deadline to apply for state tax credits the Legislature provided in 2017 to assist in starting operations.
Beginning farmer credits are available to Minnesota residents for the sale or lease of land, equipment, machinery and livestock. Qualified applicants include those looking to start farming or those who began farming within the past 10 years. Applicants must provide projected earnings statements, have a net worth less than $816,800, and enroll in an approved financial management program. Other stipulations apply, such as the farmer cannot be directly related to the person from which he or she is buying or renting assets.
“Agriculture is a major driver of our economy in Greater Minnesota and, for many families, it is more than just a way to make a living – it is a way of life,” Urdahl said. “That said, start-up costs can be prohibitive for people trying to make a go of farming. We set up these tax credits to help reduce financial barriers so new farmers have a better chance to succeed. I hope people take advantage of these tools.”
Three levels of credits are available to agricultural asset owners:
- 5 percent of the lesser of the sale price or fair market value of the agricultural asset up to a maximum of $32,000;
- 10 percent of the gross rental income of each of the first, second and third years of a rental agreement, up to a maximum of $7,000 per year;
- 15 percent of the cash equivalent of the gross rental income in each of the first, second or third year of a share rent agreement, up to a maximum of $10,000 per year.
The Beginning Farmer Tax Credit is available on a first-come, first-served basis.
The MDA also indicates farmers can apply for a separate tax credit to offset the cost of a financial management program – up to a maximum of $1,500 per year – for up to three years.
Call the MDA at (651) 201-6000 or visit www.mda..mn.us for more information.