The bill establishes a state income tax credit for active qualified
stewardship practices on a farm or ranch beginning January 1, 2026. There are 3 tiers of tax credits that may be earned by a qualified taxpayer. For actively practicing one qualified stewardship practice, a qualified taxpayer may earn a state income tax credit equal to $75 per acre of land covered by the qualified stewardship practice, up to a maximum credit of $150,000 in one income tax year. For actively practicing 2 qualified stewardship practices, a qualified taxpayer may earn a state income tax credit equal to $100 per acre of land covered by the qualified stewardship practices, up to a maximum credit of $200,000 in one income tax year. For actively practicing 3 or more qualified stewardship practices, a qualified taxpayer may earn a state income tax credit up to $150 per acre of land covered by the qualified stewardship practices, up to a maximum of $300,000 per income tax year. The tax credit is refundable and may not be carried forward.
To claim the credit, a qualified taxpayer must apply to the
department of agriculture for a tax credit certificate. The department of agriculture will evaluate the application and issue the certificate if the taxpayer qualifies for the tax credit. If a tax credit certificate is issued, the qualified taxpayer must attach it to the taxpayer's income tax return and submit it to the department of revenue.
The aggregate amount of tax credits issued in one calendar year
cannot exceed $10 million. After certificates have been issued for credits that exceed an aggregate of $10 million for all qualified taxpayers during a calendar year, any claims that exceed the amount allowed are placed on a wait list in the order submitted and a certificate is issued for use of the credit in the next income tax year. No more than $5 million in claims shall be placed on the wait list in any given calendar year.
Only one tax credit certificate may be issued per qualified taxpayer
in a calendar year, and the qualified taxpayer claiming the credit may only receive the tax credit for up to 3 income tax years. No credit may be earned if the qualified taxpayer has received another tax credit, a tax deduction, or a grant related to agricultural land health from any source during the income tax year for which the tax credit is sought.
