Rule

Minnesota’s corporate farming law passed in 1973 to "to encourage and protect the family farm as a basic economic unit". The law states that"No corporation, limited liability company, pension or investment fund, trust, or limited partnership shall engage in farming…directly or indirectly, own, acquire, or otherwise obtain any interest, in agricultural land". However, several exceptions exist. While the law applies to all livestock, poultry is completely exempt. For other livestock a corporation can retain livestock ownership for one production cycle or 18 months. Other exemptions exist for timber land, nonprofits, and farm trusts.… Read More

Initiative Number 300, the country’s toughest anti-corporate farming law, was adopted in 1982 as part of the state’s constitution–thus it cannot be changed by the legislature. Its reach is broad, covering not only land ownership but the operation of farms and ranches. Thus a corporation cannot even own livestock that are custom fed or contract-produced in another feedlot.… Read More

The Internal Revenue Code, Section 1042(g) is a new provision passed by Congress in 1998 that allows the owners of agricultural and horticultural processing plants to defer the capital gains tax as long as they (1) sell to a farmers’ cooperative whose members include the farmers who supply the facility, and (2) reinvest the proceeds in corporate stocks and bonds. The purpose of this tax break, according to the National Council of Farmer Cooperatives, is to give farmers a"tax-leveraged self-help mechanism to encourage them to move into further processing and capture a larger share of the nation’s food dollar." The new provision helps to make farmer co-ops the buyers of choice for agricultural processing facilities and gives them enough leverage to negotiate an attractive price. The buyers must include growers responsible for at least 50% of the input to the plant.… Read More

The Oklahoma Producers Tax Credit (H.B. 2959) passed in 1996, giving a value added processing tax credit to farmers and ranchers. For every dollar an Oklahoma agricultural producer invests in an agricultural processing venture, they receive a 30% tax credit. Outside investors may invest in facilities, but do not qualify for the tax credit. The credit can be carried for 7 years.… Read More

In 2001 North Dakota lawmakers approved Senate Bill Number 2386, which gives a state income tax credit of up to a maximum of $6,000 annually for people who invest in agricultural processing cooperatives. The tax credit is equivalent to thirty percent of the amount invested in the cooperative by the taxpayer, up to a total annual investment of$20,000. Investors in cooperatives or limited liability corporations are eligible for the credit, so long as the business has an agricultural commodity processing facility in this state and is more than half farmer-owned.… Read More

The Missouri New Generation Cooperative Incentive Tax Credit Program is provided by the Missouri Agricultural and Small Business Development Authority to encourage investments in new-gen co-ops. Authorized under HB 888 passed last July, the credit is allocated specifically for incorporated cooperatives that own or develop facilities producing products derived from agricultural commodities or renewable fuel production facilities.… Read More

In 1999 the Iowa legislature passed a law allowing value-added agricultural businesses to claim a ten percent corporate tax credit on new investment which is "directly related to new jobs created by the location or expansion of an eligible business." But co-ops, which don’t pay state income tax, weren’t eligible. HF 716, signed into law on July 1, 2001, changes that by making ethanol cooperatives eligible for the$4 million in annual available tax credits. It allows investors in non-profit co-ops, organizing to create new ethanol plants, to use tax credits up to 10% of their investment.… Read More

In May 2001 the Colorado legislature passed HB 1086, which created the Agriculture Value-Added Development Board within the Department of Agriculture. The Board makes grants, loans and loan guarantees, and equity investments, and also offers tax credits to eligible agricultural value-added cooperatives. The tax credit is available for members of eligible agriculture value-added cooperatives in an amount equal to the lesser of 50 percent of the member’s investment or$15,000, up to a maximum amount per project of $1,500,000 (these are the same limits as the Missouri tax credit). $4 million is available for tax credits on an annual basis.… Read More