99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
HB3903
 
Introduced , by Rep. Avery Bourne
 
SYNOPSIS AS INTRODUCED:
 

 
35 ILCS 5/224 new

     Amends the Illinois Income Tax Act.  Creates a credit for each person who hires a beginning farmer to do agricultural contract work for the production of crops or livestock in Illinois during the taxable year pursuant to a custom farming contract.  Provides that the amount of the credit shall be 7% of the amount actually paid to the beginning farmer under the contract during the taxable year, except that, if the beginning farmer is a veteran, then, during the first taxable year of the contract, the amount of the credit shall be increased to 8% of the amount actually paid to that beginning farmer.  Provides that the credit is exempt from the Act's automatic sunset provision.  Effective immediately.
  


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FISCAL NOTE ACT MAY APPLY
 
 
A BILL FOR
 

  
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1    AN ACT concerning revenue.
  
 
2    Be it enacted by the People of the State of Illinois,
 
3represented in the General Assembly:
  
 
 
4    Section 5. The Illinois Income Tax Act is amended  by adding 
5Section 224 as follows:
 
6    (35 ILCS 5/224 new)
7    Sec. 224. Custom farming tax contract credit.
8    (a)   For taxable years beginning on or after January 1, 
92016, any person who hires a beginning farmer to do 
10agricultural contract work for the production of crops or 
11livestock in Illinois during the taxable year pursuant to a 
12custom farming contract is entitled to a credit as provided in 
13this Section.  The amount of the credit shall be 7% of the 
14amount actually paid to the beginning farmer under the contract 
15during the taxable year, except that, if the beginning farmer 
16is a veteran, then, during the first taxable year of the 
17contract, the amount of the credit shall be increased to 8% of 
18the amount actually paid to that beginning farmer.  The custom 
19farming contract must (i)  provide that the taxpayer pay the 
20beginning farmer on a cash basis, (ii) be in writing for a term 
21of not more than 12 months, (iii)  provide for payment of at 
22least $1,000, and (iv) be approved by the Illinois Finance 
23Authority.  The taxpayer must make all management decisions 
 
 
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1substantially contributing to or affecting the production of 
2crops or livestock located on the agricultural land.  However, 
3the beginning farmer is not prohibited from regularly or 
4frequently taking part in making day-to-day operational 
5decisions affecting production. 
6    (b)  For partners, shareholders of subchapter S 
7corporations, and owners of limited liability companies, if the 
8liability company is treated as a partnership for purposes of 
9federal and State income taxation, there shall be allowed a 
10credit under this subsection to be determined in accordance 
11with the determination of income and distributive share of 
12income under Sections 702 and 704 and subchapter S of the 
13Internal Revenue Code. 
14    (c)  In no event shall a credit under this Section reduce 
15the taxpayer's liability to less than zero. If the amount of 
16the credit exceeds the tax liability for the year, the excess 
17may be carried forward and applied to the tax liability of the 
185 taxable years following the excess credit year. The tax 
19credit shall be applied to the earliest year for which there is 
20a tax liability. If there are credits for more than one year 
21that are available to offset a liability, the earlier credit 
22shall be applied first. 
23    (d)  As used in this Section: 
24    "Beginning farmer" means a person who meets the following 
25qualifications: 
26        (1)  the person is a resident of Illinois; 
 
 
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1        (2)  the person is at least 18 years of age;
2        (3)  the person is not related to the taxpayer as a 
3    spouse, child, stepchild, brother, or sister; 
4        (4)  the person has a net worth of less than $703,844 at 
5    the time of the contract; 
6        (5)  the person must submit a letter with the agreement 
7    at the time of approval by the Illinois Finance Authority 
8    documenting their education, training, and experience in 
9    farming; 
10        (6)  the person must have adequate working capital, farm 
11    equipment, machinery, and livestock, as determined by the 
12    Illinois Finance Authority; and 
13        (7)  the person must perform the duties required of the 
14    beginning farmer according to the terms of the contract. 
15    (e)  This Section is exempt from the provisions of Section 
16250. 
 
 
17    Section 99. Effective date. This Act takes effect upon 
18becoming law.