What's happening
This bill creates a tax credit for businesses that purchase New York-grown crops to use in value-added products.
Why it matters
Encourages local sourcing and supports New York farmers. By offering tax credits to businesses that use New York-grown crops in processed or "value-added" products, the bill incentivizes companies to purchase from local producers, potentially boosting demand and farm revenues within the state.
Targets a range of businesses and products. The credit is available to corporations, LLCs, partnerships, and sole proprietorships, and covers a variety of crops—fruits, vegetables, potatoes, and dry beans—used in products that are processed to increase their value, such as sauces, jams, canned goods, and more.
Provides tiered incentives based on local crop usage. The size of the tax credit increases with the percentage of a business’s net sales tied to value-added products made from New York-grown crops, rewarding greater commitment to local sourcing and potentially encouraging businesses to shift more production toward these ingredients.
Adds transparency and accountability measures. Businesses must provide detailed reports with their tax filings, including information about the producers, purchase amounts, and locations, which helps verify the local economic impact and prevents misuse of the credit.
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Who cares
Headline styles
Tax Credit for NY Crops
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Recommitted to rules
- Ordered to third reading cal.1569
- Committee discharged and committed to rules
- Referred to investigations and government operations
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7217
IN SENATE
January 4, 2018
Introduced by Sen. RITCHIE -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law, in relation to creating a tax credit for companies that purchase New York-grown crops and use such crops in value added products
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 44 to read as follows:
§ 44. NY crops for value added products tax credit. (a) General. A taxpayer subject to tax under article nine, nine-A or twenty-two of this chapter shall be allowed a credit against such tax pursuant to the provisions referenced in subdivision (e) of this section, however, the unused portion of any tax credit claimed shall not be carried forward and applied in another tax year. The tax credit allowed pursuant to this section shall apply to taxable years beginning on or after January first, two thousand nineteen.
(b) Definitions. For the purposes of this section the following terms shall have the following meanings:
(1) "crop" shall mean (i) fruits, including apples, peaches, grapes, cherries and berries, (ii) vegetables, including tomatoes, snap beans, cabbage, carrots, beets and onions, and (iii) potatoes and dry beans;
(2) "value added product" shall mean the increase in the fair market value of a product resulting from the processing of such product;
(3) "net sales" shall mean the total sales of the business subject to tax.
(4) "eligible taxpayer" means a corporation (including a New York S corporation), a sole proprietorship, a limited liability company or a partnership.
(c) The amount of the credit shall be proscribed according to the following schedule:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13926-03-7
S. 7217 2
(1) for twenty percent of net sales attributed to value added products that used a New York-grown crop, the credit shall be one thousand five hundred dollars.
(2) for forty percent of net sales attributed to value added products that used a New York-grown crop, the credit shall be three thousand dollars.
(3) for sixty percent of net sales attributed to value added products that used a New York-grown crop, the credit shall be six thousand dollars.
(4) for eighty percent of net sales attributed to value added products that used a New York-grown crop, the credit shall be twelve thousand dollars.
(5) for one hundred percent of net sales attributed to value added products that used a New York-grown crop, the credit shall be twentyfive thousand dollars.
(d) (1) Businesses claiming the NY crops for value added products tax credit shall submit a computer-generated report with tax returns that claim a tax credit.
(2) Such report shall include the name of the producer and the physical place of business where the products are produced.
(3) The amount paid by the grocer or business to the producer and amount of units purchased.
(e) Cross-references. For application of the credit provided for in this section, see the following provisions of this chapter:
(1) Article 9: Section 187-t.
(2) Article 9-A: Section 210-B, subdivision 53.
(3) Article 22: Section 606, subsections (i) and (iii).
§ 2. Section 210-B of the tax law is amended by adding a new subdivision 53 to read as follows:
53. NY crops for value added products tax credit. A taxpayer shall be allowed a credit, to be computed as provided in section forty-four of this chapter against the tax imposed by this article. The credit allowed under this subdivision for any taxable year shall not reduce the tax due for such year to less than the fixed dollar minimum amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such amount or if the taxpayer otherwise pays tax based on the fixed dollar minimum amount, any amount of credit thus not deductible in such taxable year shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon. The tax credit allowed pursuant to this section shall apply to taxable years beginning on or after January first, two thousand nineteen.
§ 3. Section 606 of the tax law is amended by adding a new subsection (iii) to read as follows:
(iii) NY crops for value added products tax credit. A taxpayer shall be allowed a credit to be computed as provided in section forty-four of this chapter against the tax imposed by this article. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. The tax credit allowed
S. 7217 3
pursuant to this section shall apply to taxable years beginning on or after January first, two thousand nineteen.
§ 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xliv) to read as follows: (xliv) NY crops for value added products Amount of credit under tax credit under subsection (iii) subdivision fifty-three of
section two hundred ten-B
§ 5. The tax law is amended by adding a new section 187-t to read as follows:
§ 187-t. NY crops for value added products tax credit. (a) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section forty-four of this chapter against the tax imposed by this article.
(b) Application of credit. The credit allowed under this subdivision for any taxable year shall not reduce the tax due for such year to less than the fixed dollar minimum amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this chapter. However, if the amount of credit allowed under this subdivision for any taxable year reduces the tax to such amount or if the taxpayer otherwise pays tax based on the fixed dollar minimum amount, any amount of credit thus not deductible in such taxable year shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon. The tax credit allowed pursuant to this section shall apply to taxable years beginning on or after January first, two thousand nineteen.
§ 6. 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 creating a tax credit for companies that purchase New York-grown crops and use such crops in value added products
Purpose
This bill provides tax credits for producers who base a percentage of sales on products processed from New York-grown crops.
Summary of provisions
Section 1 amends the tax law by adding a section, for taxpayers subject to article nine, nine-A, or twenty-two of the tax law, creating tax credits for percentages of overall sales that are based on products generated from or using New York-grown crops. This section defines terms applicable to the tax credit, establishes reporting requirements for businesses claiming the tax credit, and limits tax credit to the taxable year in which the tax credit is claimed.
Read the full memo (709 words)
Section 2 amends § 210-B of the tax law by adding a subdivision defining when a taxpayer shall qualify for the New York crops value added products tax credit. This section identifies the fixed dollar amount to which the New York crop value added products tax credit can reduce tax due for the year. This section declares that any of the New York crop value added products tax credit that is not deductible to lower the tax due beyond the identified amount will be treated as an overpayment of tax to be credited or refunded.
Section 3 amends § 606 of the tax law by adding subsection (iii) allow- ing New York crops value added products tax credit to be calculated against personal income tax. Where credits exceed the taxpayer's tax for the taxable year, the excess credit will be treated as an overpayment and result in a refund to the taxpayer for the excess credit.
Section 4 amends § 606(i)(B) by adding clause (xliv) defining the New York crop value added products tax credit as the amount of credit calcu- lated pursuant to the new subsection under § 210-B of the tax law added by § 2 of this act.
Section 5 amends the corporation tax law by adding a section identifying the fixed dollar amount to which the New York crop value added products tax credit can reduce tax due for the year. This section declares that any of the New York crop value added products tax credit that is not deductible to lower the tax due beyond the identified amount will be treated as an overpayment of tax to be credited or refunded.
Section 6 is the effective date and applies the terms of this act to taxable years beginning on or after January 1, 2019.
Justification
Agriculture represents New York State's leading industry. Each year, New York farmers face greater hardship through competitive pressures from out-of-state and international market competition. Many farmers rely on sales of their crops to processors that use crops to create a value added product. New Yorkers are increasingly concerned with where compa- nies source ingredients for their products and what ingredients are used in processing. One fast-growing industry affected by these pressures is the hops, malting barley, and wheat industry. By using New York-grown crops, companies have the opportunity to add value to their product, while also benefitting New York farmers.
This tax credit incentivizes companies operating in New York State to purchase New York-grown crops through scaling tax credits based on the percentage of overall sales the company makes attributed to the products sold which the company processed with New York-grown crops. Eligible crops include various fruits, vegetables, and field crops including, among others, wheat, barley, and hops.
Due to competitive pressures, craft beer producers often source brewing ingredients from outside the state. With New York State's craft beer industry rapidly growing, this bill capitalizes on the economic opportu- nity for New York wheat, hops, and barley growers, among others, by encouraging New York craft beer producers to source more of their brew- ing ingredients within the state. Providing this incentive to craft beer producers will keep industry dollars in the state economy while encour- aging further growth of these high-demand crops.
Legislative history
New Bill.
Fiscal implications
To be determined.
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.