SB168 Alabama 2018 Session

Summary

Primary Sponsor

Tom Whatley

Republican

Session

Regular Session 2018

Title

Income, business privilege tax credit, for sales/rent of agricultural assets to beginning farmers

Summary

SB 168 would create income tax and business privilege tax credits for the sale or rental of agricultural assets to beginning farmers in Alabama.

What This Bill Does

The bill would allow an owner of agricultural assets to claim a tax credit against Alabama income tax or business privilege tax for selling or renting assets to a certified beginning farmer. Credit amounts depend on the arrangement: 5% of gross rental income per year for three years (max $7,000/year); 10% of cash rental value for share rents (max $10,000/year); or 15% of the lesser of sale price or fair market value (max $32,000). Beginning farmers must meet eligibility criteria and be certified by the Department of Agriculture and Industries; certification is valid for the year of certification and the next two years, with recertification required. Credits are limited to the tax liability and may carry forward up to 15 years; the department administers certification and reports to the Legislature.

Who It Affects

• Beginning farmers: may receive a tax credit for qualifying purchases or rentals of agricultural assets, provided they meet eligibility criteria and are certified.
• Owners of agricultural assets: may receive a tax credit against their income or business tax for selling or renting assets to beginning farmers, subject to certification and annual credit limits.

Key Provisions

• Defines agricultural assets and beginning farmers, including eligibility criteria such as residency, entry into farming within 10 years, being not closely related to the owner, and net worth limits with inflation adjustments.
• Establishes three credit options and caps: 5% of gross rental income per year for three years (max $7,000/year); 10% of cash equivalent of gross rent for share rent (max $10,000/year); 15% of the lesser of sale price or fair market value (max $32,000).
• Requires department certification of both beginning farmers and asset owners; credits require approval and must be based on prevailing community rental rates.
• Credit is limited to the taxpayer’s liability and may be carried forward for up to 15 years if it exceeds the liability.
• Certification is valid for the year of certification and the following two years, with recertification required thereafter.
• The Department of Agriculture and Industries administers the program and reports data to the Legislature, including credits issued and geographic distribution.
• An appeal process exists for department decisions, with specific timelines, and credits are subject to audit by the Revenue Department.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation