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Panel advances bill to allow single-member LLCs access to beginning farmer tax credit; department seeks narrower language
Summary
The committee voted to send House File 1292 to the tax committee. The bill would let beginning farmers who operate as limited liability companies be eligible for Minnesota’s beginning farmer tax credit; the Department of Agriculture asked for a drafting change to clarify single-member LLC eligibility.
Representative Hewitt presented House File 1292, a proposal to expand eligibility for Minnesota’s beginning farmer tax credit to include beginning farmers who operate through limited liability companies. The committee voted to refer the bill to the tax committee.
Hunter Peterson of the Minnesota Farm Bureau testified in support and said ag credit organizations Compier Financial and AgCountry back the change. Jenny Heck, program administrator for the tax credit at the Minnesota Department of Agriculture, asked the committee to adopt a drafting clarification: she recommended removing a cross-reference to a broader corporate‑farm LLC definition so the bill clearly includes single‑member (individual‑owned) LLCs rather than multi‑member corporate‑style LLCs.
Heck said last year about 439 beginning farmers used the program and that the Department typically receives one or two inquiries annually about LLC eligibility. She summarized the tax-credit mechanics for the committee: for cash leases the credit is 10 percent of annual rental income with a cap of $7,000; for sales the cap is $50,000. Representative Hewitt said he would work with the department and the tax committee to refine language to ensure the bill meets the intent of expanding access without generating unintended consequences.
The committee approved referral to the tax committee by voice vote; no roll-call tally was recorded.
