NY State Senate Bill 2025-S10541

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 19, 2026	referred to investigations and government operations

2025-S10541 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §§42 & 606, Tax L

2025-S10541 (ACTIVE) - Summary

Includes "custom farm operators" within the definition of "eligible farmer"; defines such term as an independent contractor who performs specific agricultural tasks including, but not limited to, tilling, planting, spraying, or harvesting, using their own machinery and labor for a set fee, typically without taking ownership of the crop.

2025-S10541 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S10541

SPONSOR: HELMING
 
TITLE OF BILL:

An act to amend the tax law, in relation to custom farm operators

 
PURPOSE:

Provides a definition for custom farm operators within "eligible farmer"
in tax law, for the purpose of retaining eligibility for certain tax
credits

 
SUMMARY OF PROVISIONS:

Section 1: Amends subdivision (c) of section 42 of the tax law to
provide that the term "eligible farmer" also includes a "custom farm
operator," and provides the duties of a custom farm operator

Section 2: Amends subsection (n) of section 606 of the tax law to
provide that the term "eligible farmer" also includes a "custom farm
operator," and provides the duties of a custom farm operator

Section 3: Provides the effective date

 
JUSTIFICATION:

Agriculture remains a critical part of New York's economy and rural
communities. New York is home to more than 33,000 farms, the vast major-
ity of which are family owned and operated. Agriculture and related
industries contribute billions of dollars annually to the state's econo-
my and remain essential to the economic stability of many rural communi-
ties.

At the same time, many farms face increasing financial pressure from
rising equipment, labor, fuel, and operating costs. Small and mid-sized
family farms are especially impacted because they often cannot afford to
purchase and maintain the highly specialized machinery required for
modem agricultural production, where equipment costs can reach hundreds
of thousands of dollars. Custom farm operators help fill that gap.

Custom operators provide services including tilling, planting, spraying,
and harvesting using their own equipment and labor. Their services are
often critical during narrow planting and harvesting windows that
directly impact crop quality, yields, and farm profitability. By giving
farms access to advanced machinery and specialized expertise without the
full cost of ownership, custom operators help improve efficiency,
increase productivity, reduce waste, and support the long-term viability
of family farms across New York.

New York currently offers agricultural tax credits, including the
refundable Investment Tax Credit (ITC) and the Farm Workforce Retention
Credit, to support agricultural operations and strengthen the state's
farming economy. However, current law does not clearly recognize custom
farm operators as eligible participants, despite the essential role they
play in agricultural production and the fact that many farms rely on
their services every growing season.


Other states have similarly recognized the important role custom farming
services play in modem agriculture through tax exemptions, agricultural
service classifications, and other statutory provisions supporting
custom operators and contract agricultural services. For example, Wash-
ington State provides tax exemptions for custom farming services includ-
ing planting, cultivating, and harvesting operations performed under
contracts using specialized agricultural machinery.  This bill reflects
similar recognition that custom farm operators are an essential part of
today's agricultural economy and should be treated as such under our
state's agricultural tax credit programs.  By clarifying eligibility in
statute, this legislation strengthens support for New York agriculture,
helps preserve family farms, supports rural economies, and ensures farm-
ers continue to have access to the specialized services necessary to
maintain efficient and sustainable operations.

 
LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law and shall apply to taxable
years commencing on and after such effective date

2025-S10541 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10541
 
                             I N  S E N A T E
 
                               May 19, 2026
                                ___________
 
 Introduced  by  Sen. HELMING -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 
 AN ACT to amend the tax law, in relation to custom farm operators
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Subdivision (c) of section 42 of the tax law, as amended by
 section  1  of  part  N of chapter 59 of the laws of 2019, is amended to
 read as follows:
   (c) For purposes of this section, the term "eligible farmer"  means  a
 taxpayer   whose  federal  gross  income  from  farming  as  defined  in
 subsection (n) of section six hundred six of this chapter for the  taxa-
 ble  year  is  at  least two-thirds of excess federal gross income.  THE
 TERM "ELIGIBLE FARMER" ALSO INCLUDES A "CUSTOM FARM OPERATOR" WHO IS  AN
 INDEPENDENT  CONTRACTOR WHO PERFORMS SPECIFIC AGRICULTURAL TASKS INCLUD-
 ING, BUT NOT LIMITED TO, TILLING,  PLANTING,  SPRAYING,  OR  HARVESTING,
 USING  THEIR  OWN  MACHINERY  AND LABOR FOR A SET FEE, TYPICALLY WITHOUT
 TAKING OWNERSHIP OF THE CROP. Excess  federal  gross  income  means  the
 amount  of federal gross income from all sources for the taxable year in
 excess of  thirty  thousand  dollars.  For  purposes  of  this  section,
 payments  from  the state's farmland protection program, administered by
 the department of agriculture and markets, shall be included as  federal
 gross income from farming for otherwise eligible farmers.
   §  2.  Paragraph 2 of subsection (n) of section 606 of the tax law, as
 amended by chapter 297 of the laws  of  2010,  is  amended  to  read  as
 follows:
   (2) Eligible farmer. For purposes of this subsection, the term "eligi-
 ble farmer" means a taxpayer whose federal gross income from farming 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15330-01-6
 S. 10541                            2
 
 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 imme-
 diately  preceding  such taxable year.   THE TERM "ELIGIBLE FARMER" ALSO
 INCLUDES A "CUSTOM FARM OPERATOR" WHO IS AN INDEPENDENT  CONTRACTOR  WHO
 PERFORMS  SPECIFIC  AGRICULTURAL  TASKS  INCLUDING,  BUT NOT LIMITED TO,
 TILLING, PLANTING, SPRAYING, OR HARVESTING, USING  THEIR  OWN  MACHINERY
 AND LABOR FOR A SET FEE, TYPICALLY WITHOUT TAKING OWNERSHIP OF THE CROP.
 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.  For  the purposes of this paragraph, payments from the
 state's farmland protection program, administered by the  department  of
 agriculture  and markets, shall be included as federal gross income from
 farming for otherwise eligible farmers.
   § 3. This act shall take effect on the first of January next  succeed-
 ing  the  date  on  which  it shall have become a law and shall apply to
 taxable years commencing on and after such effective date.

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Senate Bill S10541

Sponsored By

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Actions

2025-S10541 (ACTIVE) - Details

2025-S10541 (ACTIVE) - Summary

2025-S10541 (ACTIVE) - Sponsor Memo

2025-S10541 (ACTIVE) - Bill Text download pdf

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Sponsored By

Pamela Helming

Current Bill Status - In Senate Committee Investigations And Government Operations Committee

Actions

2025-S10541 (ACTIVE) - Details

2025-S10541 (ACTIVE) - Summary

2025-S10541 (ACTIVE) - Sponsor Memo

2025-S10541 (ACTIVE) - Bill Text download pdf

Comments