What's happening
This bill increases tax deductions for small farm businesses, allowing them to deduct 20% of net farm income under $350,000.
Why it matters
Targets relief to small farms. By specifically defining "farm business" and setting an income cap ($350,000 net farm income), the bill ensures that increased deductions benefit genuinely small-scale farmers, not large agribusinesses.
Boosts farm profitability and cash flow. Allowing a 20% deduction on net farm income could significantly reduce tax burdens for eligible farms, freeing up capital for reinvestment, operational stability, or debt reduction, which can be especially meaningful in years with thin profit margins.
Expands eligibility to farm business owners in various legal structures. The bill includes not just sole proprietors but also members, partners, and S corporation shareholders, making the benefit accessible to a wide range of small farm business owners, regardless of how their operation is organized.
May support rural economies and agricultural sustainability. By increasing after-tax income for small farms, the bill could help maintain family farms, stabilize rural communities, and potentially encourage new or beginning farmers to enter or remain in agriculture.
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Who cares
Headline styles
Cut Taxes for Small Farms
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Print number 2909a
- Amend and recommit to investigations and government operations
- Referred to investigations and government operations
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Cut Taxes for Small Farms
In Assembly Committee · Ways And Means · Sponsor William Magee
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2909--A
2017-2018 Regular Sessions
IN SENATE
January 18, 2017
Introduced by Sens. RITCHIE, O'MARA, SERINO -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to the tax treatment of farm income of certain farm business taxpayers
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 39 of subsection (c) of section 612 of the tax law, as added by section 1 of part Y of chapter 59 of the laws of 2013, is amended to read as follows:
(39) (A) In the case of a taxpayer who is a small business who has business income [and/or farm income] as defined in the laws of the United States, an amount equal to three percent of the net items of income, gain, loss and deduction attributable to such business [or farm] entering into federal adjusted gross income, but not less than zero, for taxable years beginning after two thousand thirteen, an amount equal to three and three-quarters percent of the net items of income, gain, loss and deduction attributable to such business [or farm] entering into federal adjusted gross income, but not less than zero, for taxable years beginning after two thousand fourteen, and an amount equal to five percent of the net items of income, gain, loss and deduction attributable to such business [or farm] entering into federal adjusted gross income, but not less than zero, for taxable years beginning after two thousand fifteen. For the purposes of this paragraph, the term small business shall mean a sole proprietor [or a farm business] who employs one or more persons during the taxable year and who has net business income [or net farm income] of less than two hundred fifty thousand dollars.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08239-02-8
S. 2909--A 2
(B) In the case of a taxpayer who is a farm business or a taxpayer who is a member, partner, or shareholder of a limited liability company, partnership, or New York S corporation, respectively, that is a farm business, who or which has farm income as defined by the laws of the United States, an amount equal to twenty percent of the net items of income, gain, loss and deduction attributable to such farm. For the purposes of this paragraph, the term farm business shall mean a farm business that has net farm income of less than three hundred fifty thousand dollars.
§ 2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2019.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to the tax treatment of farm income of certain farm business taxpayers
Purpose
Increases the personal income tax exemption currently available to farm businesses from 5 percent to 20 percent for farm income; Eliminates the current employee qualification and raises the income eligibility thresh- old from $250,000 in farm income to $350,000 in farm income.
Summary of provisions
Section 1 amends the Personal Income Tax, Section 612 of the Tax Law to increase the exemption of farm income from 5 percent to 20 percent for farm businesses (sole proprietors, LLCs, partnerships and S-corpora- tions) and raises the farm income eligibility from $250,000 to $350,000. There is no employment requirement for farm businesses to receive this exemption.
Section 2 is the effective date.
Justification
New York's family farms are struggling to maintain their viability with ever-increasing costs and market pressures from outside of the state. Reducing the cost of doing business will help New York's farm economy grow and remain competitive.
The FY 2014 Enacted Budget included a Senate sponsored Personal Income Tax exemption for small businesses and small farms. The exemption is equal to five percent of net income in 2016 and beyond. To qualify, the business must be a sole proprietor or farm (regardless of how the busi- ness is structured, sole proprietor, LLC, etc.), have less than $250,000 in net business income and employ at least one employee. This increase in the exemption will build on the progress we have already made and will help New York's family farms remain an integral part of the State's economy for generations to come.
Legislative history
2016: S.6707 Passed the Senate/A.9466 Referred to Ways and Means.
Fiscal implications
This bill will reduce personal income taxes for farmers by $5 million annually, beginning in SFY 2017-18.
Effective date
This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2019.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.