Provides corporation business tax and gross income tax credits to persons hiring beginning farmers to perform custom farming.
If enacted, the bill would allow taxpayers to claim tax credits against their corporate business tax or gross income tax based on amounts paid to qualified beginning farmers. The specifics include a tax credit of up to 8 percent for veterans in their first year and 7 percent in subsequent years. If the farmer is not a veteran, the credit is consistently set at 7 percent. This legislation is expected to reduce the financial barriers to entry for new farmers, thereby promoting sustainable agricultural practices.
Assembly Bill A2718 aims to support the agricultural sector in New Jersey by providing corporation business tax and gross income tax credits to taxpayers who hire beginning farmers for custom farming practices. This legislation is particularly timely as the average age of farmers is increasing, with the average age in New Jersey reaching nearly 60 years. By incentivizing the hiring of younger, qualified farmers, the bill seeks to ensure that more agricultural land is kept productive and that new farmers can gain valuable experience and resources.
There may be concern about the qualification criteria and the potential for misuse of the tax credits. The legislation restricts eligibility to those without a substantial interest in the agricultural land involved and outlines that a written contract must exist to establish the terms of the farming relationship. With a limit of $50,000 per taxpayer per year and a cap on the total credits issued annually, the bill aims to balance incentives with fiscal responsibility.