Cooperative Tax Credit – Missouri

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.

The tax credits are only available to individuals or entities that are members of the new-generation co-ops- outside investors are ineligible. The amount of a tax credit issued to a member may be the lesser of 50 percent of the member’s cash investment or $15,000. Under the program, farmers have 8 years to apply the tax credit, and may transfer or sell the credits.

Thecredit program has a maximum allocation per project of $1.5 million. Three million dollars are available in the program this year, with $6 million/year in subsequent years until 2010. Since enactment, the program has encouraged the development of two new farmer owned ethanol cooperatives. On the federal level, Rep Talent (R-MO) may introduce legislation to apply his state’s program nationally. The bill will provide a producer investment tax credit for up to 50 percent of the producer investment in value-added co-ops, up to $30,000.