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Panel lays over bill to extend Ag Homestead tax credit to very small commercial farms
Summary
Senate File 14-98 would allow farms cultivating fewer than 11 contiguous acres, but demonstrating commercial farming activity, to qualify for the Agriculture Homestead Tax Credit. Committee adopted a technical amendment and laid the bill over for the omnibus package after testimony from small-scale and specialty crop farmers.
Senate File 14-98, proposing to expand eligibility for the Agricultural Homestead Tax Credit to include certain very small commercial farms (fewer than 11 contiguous acres) that demonstrate commercial activity, was laid over for omnibus consideration on Wednesday.
Sponsor Senator Putnam said the change recognizes intensive, revenue-generating small farms that are often excluded by acreage thresholds. "We're not talking about gardeners. We're talking about farmers who are in the business of agriculture," Putnam told the committee. The bill adds requirements that small farms must demonstrate commercial operation by filing (or declaring intent to file) IRS Schedule F and meet gross-income thresholds to qualify.
Kelsey Zavadra, identified as president of the Chisago County Farmers Union and a specialty-crop farmer operating on roughly five acres, testified the acreage threshold is a barrier for young farmers who use intensive production techniques and direct-to-consumer channels. "Missing out on this tax credit is important to me because I'm operating on a slim profit margin and property taxes are significant," she said.
Senators and counsel discussed how floriculture and other high-intensity enterprises might fit the bill's definitions and whether additional statutory adjustments are needed for some operations; counsel noted potential follow-up coordination with the Agriculture Committee. Action: the committee adopted the author's A1 (date) amendment and laid Senate File 14-98 over for omnibus consideration.
Supporters argued the change would make tax treatment more equitable for intensive small-scale commercial farms and help beginning farmers invest in infrastructure and reside on or near their farms.
The committee recorded no opposition in the hearing; staff counsel suggested follow-up conversations to reconcile related bills dealing with intensive small-farm classification.
