S T A T E O F N E W Y O R K
________________________________________________________________________
3347
2009-2010 Regular Sessions
I N A S S E M B L Y
January 27, 2009
___________
Introduced by M. of A. MAGEE -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to partial eligibility of farm-
ers for the agricultural property tax credit
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraphs (a) and (b) of subdivision 22 of section 210 of
the tax law, paragraph (a) as amended by chapter 315 of the laws of 1998
and paragraph (b) as amended by chapter 527 of the laws of 2003, are
amended to read as follows:
(a) General. In the case of a taxpayer which is an eligible farmer OR
PARTIALLY ELIGIBLE FARMER, or an eligible farmer [who] OR PARTIALLY
ELIGIBLE FARMER WHICH has paid taxes pursuant to a land contract, there
shall be allowed a credit OR PARTIAL CREDIT for the allowable school
district property taxes. The term "allowable school district property
taxes" means the school district property taxes paid during the taxable
year on qualified agricultural property, subject to the acreage limita-
tion provided in paragraph (e) of this subdivision and the income limi-
tation provided in paragraph (f) of this subdivision, WHICH QUALIFICA-
TIONS SHALL ALL APPLY IDENTICALLY TO ELIGIBLE FARMERS AND PARTIALLY
ELIGIBLE FARMERS. THE PARTIAL CREDIT ALLOWED TO A PARTIALLY ELIGIBLE
FARMER SHALL BE EQUAL TO ONE-HALF OF THE CREDIT THAT WOULD BE ALLOWED TO
AN ELIGIBLE FARMER, CALCULATING THE ALLOWABLE SCHOOL DISTRICT PROPERTY
TAXES AS PROVIDED IN THIS PARAGRAPH, WITH ALL STATED QUALIFICATIONS.
(b) (1) Eligible farmer. For purposes of this subdivision, the term
"eligible farmer" means a taxpayer whose federal gross income from farm-
ing for the taxable year is at least two-thirds of excess federal gross
income. The term "eligible farmer" also includes a corporation other
than the taxpayer of record for qualified agricultural land which has
paid the school district property taxes on such land pursuant to a
contract for the future purchase of such land; provided that such corpo-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05398-01-9
A. 3347 2
ration has a federal gross income from farming for the taxable year
which is at least two-thirds of excess federal gross income; and
provided further that, in determining such income eligibility, a taxpay-
er may, for any taxable year, use the average of such federal gross
income from farming for that taxable year and such income for the two
consecutive taxable years immediately preceding such taxable year.
Excess federal gross income means the amount of federal gross income
from all sources for the taxable year in excess of thirty thousand
dollars.
(2) PARTIALLY ELIGIBLE FARMER. FOR PURPOSES OF THIS SUBDIVISION, THE
TERM "PARTIALLY ELIGIBLE FARMER" MEANS A TAXPAYER WHOSE FEDERAL GROSS
INCOME FROM FARMING FOR THE TAXABLE YEAR IS AT LEAST FORTY PERCENT OF,
BUT LESS THAN TWO-THIRDS OF, EXCESS FEDERAL GROSS INCOME. THE TERM
"PARTIALLY ELIGIBLE FARMER" ALSO INCLUDES A CORPORATION OTHER THAN THE
TAXPAYER OF RECORD FOR QUALIFIED AGRICULTURAL LAND WHICH HAS PAID THE
SCHOOL DISTRICT PROPERTY TAXES ON SUCH LAND PURSUANT TO A CONTRACT FOR
THE FUTURE PURCHASE OF SUCH LAND; PROVIDED THAT SUCH CORPORATION HAS A
FEDERAL GROSS INCOME FROM FARMING FOR THE TAXABLE YEAR WHICH IS AT LEAST
FORTY PERCENT OF, BUT LESS THAN TWO-THIRDS OF, EXCESS FEDERAL GROSS
INCOME; AND PROVIDED FURTHER THAT, IN DETERMINING SUCH INCOME ELIGIBIL-
ITY, A TAXPAYER MAY, FOR ANY TAXABLE YEAR, USE THE AVERAGE OF SUCH
FEDERAL GROSS INCOME FROM FARMING FOR THAT TAXABLE YEAR AND SUCH INCOME
FOR THE TWO CONSECUTIVE TAXABLE YEARS IMMEDIATELY PRECEDING SUCH TAXABLE
YEAR. EXCESS FEDERAL GROSS INCOME MEANS THE AMOUNT OF FEDERAL GROSS
INCOME FROM ALL SOURCES FOR THE TAXABLE YEAR IN EXCESS OF THIRTY THOU-
SAND DOLLARS.
S 2. Subparagraph 1 of paragraph (e), paragraph (g), and subparagraphs
1 and 2 of paragraph (h) of subdivision 22 of section 210 of the tax
law, as added by chapter 309 of the laws of 1996, are amended to read as
follows:
(1) Eligible taxes. In the event that the qualified agricultural prop-
erty owned by the taxpayer includes land in excess of the base acreage
as provided in this paragraph, the amount of school district property
taxes eligible for credit OR PARTIAL CREDIT under this subdivision shall
be that portion of the school district property taxes which bears the
same ratio to the total school district property taxes paid during the
taxable year, as the acreage allowable under this paragraph bears to the
entire acreage of such land.
(g) In no event shall the credit OR PARTIAL CREDIT provided herein be
allowed in an amount which will reduce the tax payable to less than the
higher of the amounts prescribed in paragraphs (c) and (d) of subdivi-
sion one of this section. If, however, the amount of credit OR PARTIAL
CREDIT allowable under this subdivision for any taxable year reduces the
tax to such amount, any amount of credit OR PARTIAL CREDIT not deduct-
ible in such taxable year may be carried over to the following year or
years and may be deducted from the taxpayer's tax for such year or
years. Provided, however, in lieu of carrying over the unused portion
of such credit OR PARTIAL CREDIT, the taxpayer may elect to treat such
unused portion as an overpayment of tax to be credited or refunded in
accordance with the provisions of section ten hundred eighty-six of this
chapter except that no interest shall be paid on such overpayment.
(1) No credit OR PARTIAL CREDIT in conversion year. In the event that
qualified agricultural property is converted by the taxpayer to nonqual-
ified use, credit OR PARTIAL CREDIT under this subdivision shall not be
allowed with respect to such property for the taxable year of conversion
(the conversion year).
A. 3347 3
(2) Credit OR PARTIAL CREDIT recapture. If the conversion by the
taxpayer of qualified agricultural property to nonqualified use occurs
during the period of the two taxable years following the taxable year
for which the credit OR PARTIAL CREDIT under this subdivision was first
claimed with respect to such property, the credit OR PARTIAL CREDIT
allowed with respect to such property for the taxable years prior to the
conversion year must be added back in the conversion year. Where the
property converted includes land, and where the conversion is of only a
portion of such land, the credit OR PARTIAL CREDIT allowed with respect
to the property converted shall be determined by multiplying the entire
credit OR PARTIAL CREDIT under this subdivision for the taxable years
prior to the conversion year by a fraction, the numerator of which is
the acreage converted and the denominator of which is the entire acreage
of such land owned by the taxpayer immediately prior to the conversion.
S 3. Paragraphs 1 and 2 of subsection (n) of section 606 of the tax
law, paragraph 1 as amended by chapter 315 of the laws of 1998 and para-
graph 2 as amended by chapter 527 of the laws of 2003, are amended to
read as follows:
(1) General. In the case of a taxpayer who is an eligible farmer OR
PARTIALLY ELIGIBLE FARMER or an eligible farmer OR PARTIALLY ELIGIBLE
FARMER who has paid taxes pursuant to a land contract, there shall be
allowed a credit OR PARTIAL CREDIT for the allowable school district
property taxes. The term "allowable school district property taxes"
means the school district property taxes paid during the taxable year on
qualified agricultural property, subject to the acreage limitation
provided in paragraph five of this subsection and the income limitation
provided in paragraph six of this subsection, WHICH QUALIFICATIONS SHALL
ALL APPLY IDENTICALLY TO ELIGIBLE FARMERS AND PARTIALLY ELIGIBLE
FARMERS. THE PARTIAL CREDIT ALLOWED TO A PARTIALLY ELIGIBLE FARMER
SHALL BE EQUAL TO ONE-HALF OF THE CREDIT THAT WOULD BE ALLOWED TO AN
ELIGIBLE FARMER, CALCULATING THE ALLOWABLE SCHOOL DISTRICT PROPERTY
TAXES AS PROVIDED IN THIS PARAGRAPH, WITH ALL STATED QUALIFICATIONS.
Such credit OR PARTIAL CREDIT shall be allowed against the taxes imposed
by this article for the taxable year reduced by the credits permitted by
this article. If the credit OR PARTIAL CREDIT exceeds the tax as so
reduced, the taxpayer may receive, and the comptroller, subject to a
certificate of the commissioner, shall pay as an overpayment, without
interest, the amount of such excess.
(2) (A) Eligible farmer. For purposes of this subsection, the term
"eligible farmer" means a taxpayer whose federal gross income from farm-
ing for the taxable year is at least two-thirds of excess federal gross
income. The term "eligible farmer" also includes an individual other
than the taxpayer of record for qualified agricultural land who has paid
the school district property taxes on such land pursuant to a contract
for the future purchase of such land; provided that such individual has
a federal gross income from farming for the taxable year which is at
least two-thirds of excess federal gross income; and provided further
that, in determining such income eligibility, a taxpayer may, for any
taxable year, use the average of such federal gross income from farming
for that taxable year and such income for the two consecutive taxable
years immediately preceding such taxable year. Excess federal gross
income means the amount of federal gross income from all sources for the
taxable year reduced by the sum (not to exceed thirty thousand dollars)
of those items included in federal gross income which consist of (i)
earned income, (ii) pension payments, including social security
payments, (iii) interest, and (iv) dividends. For purposes of this para-
A. 3347 4
graph, the term "earned income" shall mean wages, salaries, tips and
other employee compensation, and those items of gross income which are
includible in the computation of net earnings from self-employment.
(B) PARTIALLY ELIGIBLE FARMER. FOR PURPOSES OF THIS SUBSECTION, THE
TERM "PARTIALLY ELIGIBLE FARMER" MEANS A TAXPAYER WHOSE FEDERAL GROSS
INCOME FROM FARMING FOR THE TAXABLE YEAR IS AT LEAST FORTY PERCENT OF,
BUT LESS THAN TWO-THIRDS OF, EXCESS FEDERAL GROSS INCOME. THE TERM
"PARTIALLY ELIGIBLE FARMER" ALSO INCLUDES AN INDIVIDUAL OTHER THAN THE
TAXPAYER OF RECORD FOR QUALIFIED AGRICULTURAL LAND WHO HAS PAID THE
SCHOOL DISTRICT PROPERTY TAXES ON SUCH LAND PURSUANT TO A CONTRACT FOR
THE FUTURE PURCHASE OF SUCH LAND; PROVIDED THAT SUCH INDIVIDUAL HAS A
FEDERAL GROSS INCOME FROM FARMING FOR THE TAXABLE YEAR WHICH IS AT LEAST
FORTY PERCENT OF, BUT LESS THAN TWO-THIRDS OF, EXCESS FEDERAL GROSS
INCOME; AND PROVIDED FURTHER THAT, IN DETERMINING SUCH INCOME ELIGIBIL-
ITY, A TAXPAYER MAY, FOR ANY TAXABLE YEAR, USE THE AVERAGE OF SUCH
FEDERAL GROSS INCOME FROM FARMING FOR THAT TAXABLE YEAR AND SUCH INCOME
FOR THE TWO CONSECUTIVE TAXABLE YEARS IMMEDIATELY PRECEDING SUCH TAXABLE
YEAR. EXCESS FEDERAL GROSS INCOME MEANS THE AMOUNT OF FEDERAL GROSS
INCOME FROM ALL SOURCES FOR THE TAXABLE YEAR REDUCED BY THE SUM (NOT TO
EXCEED THIRTY THOUSAND DOLLARS) OF THOSE ITEMS INCLUDED IN FEDERAL GROSS
INCOME WHICH CONSIST OF (I) EARNED INCOME, (II) PENSION PAYMENTS,
INCLUDING SOCIAL SECURITY PAYMENTS, (III) INTEREST, AND (IV) DIVIDENDS.
FOR PURPOSES OF THIS PARAGRAPH, THE TERM "EARNED INCOME" SHALL MEAN
WAGES, SALARIES, TIPS AND OTHER EMPLOYEE COMPENSATION, AND THOSE ITEMS
OF GROSS INCOME WHICH ARE INCLUDIBLE IN THE COMPUTATION OF NET EARNINGS
FROM SELF-EMPLOYMENT.
S 4. Subparagraph (A) of paragraph 5 and subparagraphs (A) and (B) of
paragraph 7 of subsection (n) of section 606 of the tax law, as added by
chapter 309 of the laws of 1996, are amended to read as follows:
(A) Eligible taxes. In the event that the qualified agricultural prop-
erty owned by the taxpayer includes land in excess of the base acreage
as provided in this paragraph, the amount of school district property
taxes eligible for credit OR PARTIAL CREDIT under this subsection shall
be that portion of the school district property taxes which bears the
same ratio to the total school district property taxes paid during the
taxable year, as the acreage allowable under this paragraph bears to the
entire acreage of such land.
(A) No credit OR PARTIAL CREDIT in conversion year. In the event that
qualified agricultural property is converted by the taxpayer to nonqual-
ified use, credit OR PARTIAL CREDIT under this subsection shall not be
allowed with respect to such property for the taxable year of conversion
(the conversion year).
(B) Credit OR PARTIAL CREDIT recapture. If the conversion by the
taxpayer of qualified agricultural property to nonqualified use occurs
during the period of the two taxable years following the taxable year
for which the credit OR PARTIAL CREDIT under this subsection was first
claimed with respect to such property, the credit OR PARTIAL CREDIT
allowed with respect to such property for the taxable years prior to the
conversion year must be added back in the conversion year. Where the
property converted includes land, and where the conversion is of only a
portion of such land, the credit OR PARTIAL CREDIT allowed with respect
to the property converted shall be determined by multiplying the entire
credit OR PARTIAL CREDIT under this subsection for the taxable years
prior to the conversion year by a fraction, the numerator of which is
the acreage converted and the denominator of which is the entire acreage
of such land owned by the taxpayer immediately prior to the conversion.
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S 5. The commissioner of taxation and finance is authorized and
directed to promulgate any rules and regulations necessary to implement
the provisions of this act.
S 6. This act shall take effect immediately and shall apply to taxable
years commencing on or after the first of January next succeeding the
date on which it shall have become a law.