HLS 23RS-720 REENGROSSED
2023 Regular Session
HOUSE BILL NO. 502
BY REPRESENTATIVES MCFARLAND AND SEABAUGH
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
TAX/SALES & USE: Modifies the definition of the term commercial farmer by removing
certain reporting requirements
1 AN ACT
2To amend and reenact R.S. 47:301(30), relative to reporting requirements applicable to
3 commercial farmers; to provide for the definition of commercial farmer; to remove
4 certain reporting requirements applicable to those persons and entities seeking to
5 qualify as commercial farmers for tax purposes; to authorize the promulgation of
6 rules; to provide for certain limitations; and to provide for related matters.
7Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:301(30) is hereby amended and reenacted to read as follows:
9 ยง301. Definitions
10 As used in this Chapter, the following words, terms, and phrases have the
11 meanings ascribed to them in this Section, unless the context clearly indicates a
12 different meaning:
13 * * *
14 (30)(a) Except as provided in Subparagraph (b) of this Paragraph, the The
15 term "commercial farmer" shall mean only those persons means either of the
16 following:
17 (i) A person regularly and occupationally engaged in producing the
18 commercial production of food or, agricultural commodities, or agricultural products
19 for sale. These terms are limited to those persons, partnerships, or corporations
20 regularly engaged in the commercial production for sale of vegetables, fruits, crops,
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HB NO. 502
1 livestock, poultry, and other food or agricultural products that report farm income
2 and expenses on a federal Schedule F or similar federal tax form, including but not
3 limited to 1065, 1120, and 1120S filed by a person assigned a North American
4 Industry Classification System (NAICS) Code beginning with 11.
5 (ii) A lessor landowner who leases an immovable for agricultural use to a
6 person described in Item (i) of this Subparagraph and maintains a joint venture
7 contractual relationship with the person.
8 (b) The secretary of the Department of Revenue, in consultation with the
9 Department of Agriculture and Forestry, shall develop and promulgate rules in
10 accordance with the Administrative Procedure Act as are necessary for the
11 administration of exemptions available to commercial farmers and the registration
12 of commercial farmers to determine who meets this definition no later than January
13 1, 2019. Notwithstanding any contrary provision of this Paragraph, the Department
14 of Revenue shall honor existing farmer exemption certificates issued by the
15 department until July 1, 2019.
16 (b) Notwithstanding the provisions of Subparagraph (a) of this Paragraph,
17 the term "commercial farmer" may include a landowner who is a party of a joint
18 venture and who leases land to a commercial farmer as defined in Subparagraph (a)
19 of this Paragraph. In order to qualify as a commercial farmer, the lessee landowner
20 shall submit documentation of the joint venture arrangement or a report of farm
21 income and expenses, including proof of lease income, from the joint venture on a
22 federal Schedule F form or similar federal tax form to the Department of Revenue
23 in order for the secretary of the department to make a determination that the taxpayer
24 is a commercial farmer.
25 (c) No state sales and use tax exemption available to a commercial farmer
26 shall be allowed or claimed for or related to an "activity not engaged in for profit"
27 as that term is defined by 26 U.S.C 183, as amended.
28 * * *
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HB NO. 502
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 502 Reengrossed 2023 Regular Session McFarland
Abstract: Removes the requirement that persons and entities seeking to qualify as
commercial farmers report income and expenses on a federal Schedule F form or
other federal tax form to the Dept. of Revenue (DOR).
Present law defines "commercial farmer" as those persons occupationally engaged in
producing food or agricultural commodities for sale. Further provides that these terms are
limited to those persons and entities regularly engaged in the commercial production for sale
of vegetables, fruits, crops, livestock, poultry, and other food or agricultural products that
report farm income and expenses on a federal Schedule F or similar federal tax form.
Present law specifies that the term "commercial farmer" may include a landowner who is a
party of a joint venture and who leases land to a commercial farmer. However, specifies that
to qualify as a commercial farmer, the lessee landowner must submit documentation of the
joint venture arrangement or a report of farm income and expenses from the joint venture
on a federal Schedule F form or similar federal tax form to DOR so the secretary can
determine if the taxpayer is a commercial farmer.
Proposed law revises the present law definition of "commercial farmer" to mean a person
regularly and occupationally engaged in the commercial production of food, agricultural
commodities, or agricultural products for sale or a lessor landowner who leases an
immovable for agricultural use to a commercial farmer and maintains a joint venture
contractual relationship with the farmer.
Proposed law removes references to a commercial farmer reporting farm income and
expenses on a federal Schedule F or similar federal tax forms and requirement that lessee
landowners submit documentation of the joint venture arrangement or report farm income
and expenses from the joint venture on a federal Schedule F form or similar federal tax form
to DOR so the secretary can determine if the taxpayer is a commercial farmer.
Proposed law prohibits state sales and use tax exemptions available to commercial farmers
from being allowed or claimed for or related to an "activity not engaged in for profit" as that
term is defined in present federal law.
(Amends R.S. 47:301(30))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Revise the definition of commercial farmer for purposes of state sales and use tax
exemptions.
2. Remove requirement that lessee landowners submit documentation of the joint
venture arrangement or report farm income and expenses from the joint venture
on a federal Schedule F form or similar federal tax form.
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HB NO. 502
3. Add prohibition for state sales and use tax exemptions available to commercial
farmers from being allowed or claimed for or related to an "activity not engaged
in for profit" as that term is defined in present federal law.
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