After two years of confusion, Iowa’s beginning farmer tax credit program will be fully funded again.
Under the bill passed this spring by Iowa legislators and signed into law by Gov. Kim Reynolds May 21, the Iowa Finance Authority may issue up to $12 million in tax credit certificates each tax year. That $12 million cap had been lowered to $6 million at the end of 2017 when lawmakers failed to vote on legislation that expired.
As a result, old agreements were honored but no new ones were signed in 2018, according to Lori Beary, community development director with the Iowa Finance Authority.
In 2009, lawmakers approved a bill adding a tax credit for landowners and beginning farmers. That program featured a credit of 5% for a cash rent contract and 15% for a crop-share contract if the landowner was renting to a beginning farmer.
In 2013, another bill expanded those levels to 7 and 17% and increased the cap to $12 million. But that 2013 bill expired at the end of 2017, and the program went back to old levels.
The bill passed this spring did not raise the credit levels for farmers — leaving them at 5% and 15% — but it did raise the cap and put some of the rules into code, Beary said. As a result, the Iowa Finance Authority will be taking new applications. The deadline is Aug. 1.
Iowa Secretary of Agriculture Mike Naig issued a release praising the move and saying that with the average age of the Iowa farmer at 57, the state needs to provide encouragement for young people to get into the profession.