Authorizes an income tax deduction for certain research expenses
The implications of SB 1365 on state laws are significant. By offering tax deductions for research expenses, the bill encourages taxpayers, especially farm owners, to invest in research and development activities that could lead to increased agricultural efficiency and sustainability. Additionally, it addresses capital gains issues for farm owners selling to beginning farmers, allowing substantial deductions that could facilitate transfers of land ownership and promote new farming initiatives.
Senate Bill 1365 seeks to amend Missouri's income tax laws by authorizing tax deductions for certain research expenses incurred by taxpayers, specifically targeting agricultural improvements. The bill allows for the subtraction of specified research expenditures from a taxpayer's federal adjusted gross income in determining their Missouri adjusted gross income. This aims to incentivize investment in agricultural research, enhancing productivity and innovation within the sector.
There are potential points of contention surrounding SB 1365. Critics may argue that the bill disproportionately benefits wealthier agricultural operations while providing limited assistance to smaller, less established farms. Furthermore, the effectiveness of tax deductions in stimulating genuine research investment can be questioned, as some fear it might simply benefit those already engaged in such activities without creating new agricultural innovations.