Monday, March 17, 2014

Tax relief for farmers in Assembly budget

Restores funding to agricultural programs

            Assemblywoman Addie J. Russell announced that the recently passed Assembly budget proposal delivers tax relief that will benefit local farmers by reforming the estate tax, repealing the franchise tax on farmers and eliminating the 18-a energy surcharge for residential customers – a classification that includes many farming operations (E.914).

            “Agriculture plays a vital role in the North Country economy and presents a real opportunity for growth,” Assemblywoman Russell said. “One of my top priorities has been to reform tax policy so the North Country can capitalize on the boom in the dairy industry and locally sourced foods.”

New York is one of only 14 states that still has an estate tax exemption lower than the federal level. In an effort to reduce the financial burden this tax places on farmers, the Assembly budget increases the estate tax threshold from $1 million to $3 million over two years, raising the amount of assets that can be excluded from this tax.

“The estate tax has not kept pace with rising land and machinery values and as a result, farmers often have more challenges planning for the future,” Assemblywoman Russell said.  “People from other parts of the state might not understand, but a farming operation with a few hundred acres, plus cattle and equipment, easily puts farmers over the $1 million exemption.  By raising the exemption level we make it more affordable for farmers to pass the business they have built over a lifetime to the next generation.”

The Assembly budget proposal also speeds up the planned phase out of the 18-a utility assessment by eliminating it immediately for residential customers and reducing the assessed rate by nearly half for all other customers. Since many farming operations are classified as residential, eliminating the 18-a energy tax will result in immediate reductions in farmer’s utility bills, Assemblywoman Russell noted.

            Also included in the budget are tax credits for the use of bioheating fuel. Bioheating fuel is heating oil blended with biodiesel which can be derived from feedstock crops like soybeans. This tax credit will provide an expanding market for products like soybean oil created when beans are crushed for feed.

 “Incentivizing the use of biofuels will help create a new market and new customers for our farmers,” Assemblywoman Russell said. “Rather than heating our homes with oil that often comes from foreign countries, biodiesel is literally homegrown and keeps more of our money in our community.”

In addition to the tax relief included in the Assembly budget, Assemblywoman Russell fought to restore funding to numerous programs that play a vital role in supporting North Country farming operations. Programs that received additional funding above the executive budget proposal include:

·       Agribusiness Child Development $1 million
·       Cornell University Rabies Program $200,000
·       Cornell University Farm Family Assistance (Farm Net) $200,000
·       NY State Apple Growers Association $544,000
·       New York Farm Viability Institute $1.1 million
·       Maple Producers $125,000
·       Tractor Rollover Program $100,000
·       NY Wine and Grape Foundation $250,000


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