Minnesota expands beginning farmer tax credit to include LLCs

The House Agriculture Finance and Policy Committee of the Minnesota Legislature convened on March 17, 2025, to discuss significant updates to the state's beginning farmer tax credit program. The proposed legislation aims to expand eligibility for this program, allowing beginning farmers to participate through limited liability corporations (LLCs).

The beginning farmer tax credit was established to support new farmers by facilitating the sale or rental of essential assets such as land, equipment, and livestock. The current bill seeks to broaden the scope of this program without altering the existing definition of a beginning farmer. Under the new provisions, applicants operating as LLCs must still meet all criteria set for beginning farmers to qualify for the tax credit.

Supporters of the bill, including representatives from the Minnesota Farm Bureau, highlighted the advantages of structuring a farming business as an LLC. These benefits include liability protection, which safeguards personal assets from business-related debts or lawsuits, and improved succession planning for farmers intending to pass their operations to future generations.

Hunter Peterson, a public policy specialist at the Minnesota Farm Bureau, expressed strong support for the legislation, noting that agricultural credit organizations such as Compier Financial and Ag Country also back the inclusion of LLCs in the tax credit program. Peterson mentioned that a related bill, introduced by Representative Hansen, is set to be discussed in the coming days.

The committee's discussions reflect a concerted effort to enhance support for beginning farmers in Minnesota, ensuring they have the necessary resources and protections to thrive in the agricultural sector. The next steps will involve further deliberations on the proposed legislation and its potential impact on the farming community.