Full Text of HB1343 103rd General Assembly
HB1343 103RD GENERAL ASSEMBLY |
| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB1343 Introduced 1/31/2023, by Rep. Lance Yednock SYNOPSIS AS INTRODUCED: |
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Amends the Illinois Income Tax Act. Creates an income tax credit for an owner of an agricultural asset who sells or rents the agricultural asset to a beginning farmer. Provides that the credit shall be equal to: (1) 5% of the lesser of the sale price or the
fair market value of the agricultural asset, up to a maximum
of $32,000; or (2) 10% of the gross rental income in each of
the first, second, and third years of a rental agreement, up
to a maximum of $7,000 per year. Provides that the taxpayer shall apply with the Department of Agriculture. Provides that the Department of Agriculture may not approve more than $5,000,000 in credits under those provisions in any one taxable year. Effective immediately.
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| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Illinois Income Tax Act is amended by | 5 | | adding Section 234 as follows: | 6 | | (35 ILCS 5/234 new) | 7 | | Sec. 234. Agricultural assets; beginning farmer. | 8 | | (a) For taxable years beginning on or after January 1, | 9 | | 2024, an owner of an agricultural asset may take
a credit | 10 | | against the tax imposed under subsections (a) and (b) of | 11 | | Section 201 for the sale or
rental of the agricultural asset to | 12 | | a beginning farmer in the
amount approved by the Department of | 13 | | Agriculture. The amount of the credit shall be equal to: | 14 | | (1) 5% of the lesser of the sale price or the
fair | 15 | | market value of the agricultural asset, up to a maximum
of | 16 | | $32,000; or | 17 | | (2) 10% of the gross rental income in each of
the | 18 | | first, second, and third years of a rental agreement, up
| 19 | | to a maximum of $7,000 per year. | 20 | | (b) The owner of the agricultural asset must apply to the | 21 | | Department of Agriculture for approval of the tax credit under | 22 | | this Section. The application must: | 23 | | (1) identify the beginning farmer to whom the assets |
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| 1 | | are sold or rented; | 2 | | (2) specify whether the beginning farmer is a brother, | 3 | | sister, ancestor, or lineal descendant of the taxpayer; | 4 | | and | 5 | | (3) contain any other information deemed necessary by | 6 | | the Department of Agriculture. | 7 | | The Department of Agriculture may not approve more than | 8 | | $5,000,000 in credits under this Section in any one taxable | 9 | | year. | 10 | | (c) In no event shall a credit under this Section reduce | 11 | | the taxpayer's liability to less than zero. If the amount of | 12 | | the credit exceeds the tax liability for the year, the excess | 13 | | may be carried forward and applied to the tax liability of the | 14 | | 5 taxable years following the excess credit year. The tax | 15 | | credit shall be applied to the earliest year for which there is | 16 | | a tax liability. If there are credits for more than one year | 17 | | that are available to offset a liability, the earlier credit | 18 | | shall be applied first. | 19 | | (d) For partners, shareholders of Subchapter S | 20 | | corporations, and owners of limited liability companies, if | 21 | | the liability company is treated as a partnership for the | 22 | | purposes of federal and State income taxation, there shall be | 23 | | allowed a credit under this Section to be determined in | 24 | | accordance with the determination of income and distributive | 25 | | share of income under Sections 702 and 704 and Subchapter S of | 26 | | the Internal Revenue Code. |
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| 1 | | (e) As used in this Section: | 2 | | "Agricultural asset" means agricultural land, livestock,
| 3 | | facilities, buildings and machinery used for farming. | 4 | | "Beginning farmer" means a person who: | 5 | | (1) has demonstrated experience in agriculture or a | 6 | | related field or has transferable skills, as determined by | 7 | | the Department of Agriculture; | 8 | | (2) has not received income from agricultural | 9 | | production for more than the 10 most recent taxable years; | 10 | | (3) intends to engage in agricultural production | 11 | | within the State and to provide the majority of the labor | 12 | | and management involved in the agricultural production; | 13 | | (4) has obtained certification from the Department of | 14 | | Agriculture as a beginning farmer; | 15 | | (5) is not, and whose spouse is not, a partner, | 16 | | member, shareholder, or trustee of the owner of the | 17 | | agricultural asset; and | 18 | | (6) is not a brother, sister, ancestor, or lineal | 19 | | descendant of the owner of the agricultural asset. | 20 | | "Farming" means the active use, management, and operation | 21 | | of real
and personal property for agricultural production. | 22 | | "Owner of an agricultural asset" means an individual, | 23 | | trust or
pass-through entity that is the owner in fee simple of | 24 | | agricultural
land or has legal title to any other agricultural | 25 | | asset. The
term does not include an equipment dealer, | 26 | | livestock dealer, or
comparable entity that is engaged in the |
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| 1 | | business of selling
agricultural assets for profit and that is | 2 | | not engaged in
farming as its primary business activity. | 3 | | (f) This Section is exempt from the provisions of Section | 4 | | 250.
| 5 | | Section 99. Effective date. This Act takes effect upon | 6 | | becoming law.
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