Lawmakers passed a bill May 13 that clarifies the number of rental agreements beginning farmers and agricultural asset owners may make under an existing tax credit program.
The Beginning Farmer Tax Credit Act, adopted in 1999, provides a personal property tax exemption of up to $100,000 and an income tax credit of up to $500 for qualified beginning farmers or livestock producers.
An owner of agricultural assets—such as cropland, pasture or machinery—is eligible for an income tax credit on the rent of those assets to a beginning farmer or producer.
It was replaced on general file with a committee amendment containing provisions of LB623, introduced by Gothenburg Sen. Matt Williams.
Under those provisions, qualified beginning farmers or livestock producers and owners of agricultural assets who have participated in a three-year rental agreement are eligible to file subsequent applications for different assets. The bill clarifies that tax credits for an asset may be issued for a maximum of three years.
The bill also defines a flex or variable rent agreement, in which a predetermined base rent is adjusted for actual crop yield or price.
Finally, the bill clarifies that the credits issued under the act are refundable.
LB560 passed on a vote of 46-0.