Illinois House Bill HB1501

Illinois 2025-2026 Regular Session

• Introduced: 1/21/25
• Refer: 1/28/25
• Refer: 2/18/25
• Refer: 3/21/25

Caption

INC TX-BEGINNING FARMER

Impact

The bill is poised to impact state laws governing agricultural taxation significantly by introducing financial incentives for landowners to support new entrants into farming. This could potentially alleviate some barriers for beginning farmers, such as high initial costs associated with acquiring land or equipment. Additionally, the Department of Agriculture is authorized to manage the program and will oversee the distribution of up to $5 million in credits annually from 2025 to 2030, with an increase to $10 million thereafter. This structured credit allocation is designed to manage the budget and ensure a sustainable program.

Summary

House Bill 1501 amends the Illinois Income Tax Act to create a tax credit program aimed at facilitating new farmers in the state. The bill specifically targets owners of agricultural assets who either sell or rent these assets to beginning farmers. The key provision of the bill offers a 5% tax credit on the lesser of the sale price or fair market value of the agricultural asset sold, and similar credits for leasing the assets under various lease agreements, like cash rent or commodity share leases. The maximum tax credit awarded for any single transaction is capped at $50,000 per taxable year.

Contention

There may be points of contention surrounding the bill, particularly related to the eligibility criteria for beginning farmers. The definition as outlined limits participation to those who have not received income from agricultural production in the past ten years and excludes close relatives of the asset owners. This could lead to debates surrounding the accessibility of the program and whether it effectively fulfills its intended purpose of promoting genuine new entrants to the agricultural sector. Critics could argue this creates unnecessary barriers for qualified individuals who may have prior experience but are not technically classified as beginning farmers.