Representatives Jimmy Panetta (D- CA) and Mike Kelly (R- PA) have re-introduced legislation they say will help family-owned farms continue operating after a family member dies. The Preserving Family Farms Act would modify tax law, allowing farmers and ranchers to pay estate taxes based on the value of their land for agricultural use.
“Outdated provisions in our tax laws are punishing family farms and causing them to split up or sell the land upon which they have spent generations working and building up,” Representative Panetta says. “The Preserving Family Farms Act would ease the burden on these operations, by ensuring that farms are appraised by the value of their business, rather than for development.”
In 1976, Congress created a special use valuation in the tax code to protect producers from excessive estate taxes. However, agricultural land values have increased by more than 200% since then. Supporters of the bill contend that the special use valuation no longer meets its intended goal of protecting producers who are most vulnerable to estate taxes.
“Pennsylvania families shouldn’t be forced to sell off or split up their farm that has often been in their name for generations,” Representative Kelly says. “To support the next generation of American farmers, we must do everything we can to ensure that family farms aren’t burdened with a sky-high estate tax should a loved one pass away. This bill will go a long way toward helping hardworking folks stay on their land in their time of need and for generations to come.”
The Preserving Family Farms Act has already been endorsed by the American Farm Bureau Federation, the National Cattlemen’s Beef Association, and multiple state-level groups.
A similar bill introduced in the last congressional session died in the Ways and Means Committee. Now, with different leadership, supporters are hoping for a favorable outcome.
EDITOR’S TAKE:
Estate taxes, as well as property taxes, have been long-standing issues for most farmers across the country. We have reported many times in this AIR about how agricultural land values are increasing, thus, building the farmer’s balance sheet. However, when it comes to taxing that property, the story becomes more complicated. That is why many states have passed what is typically referred to as “Right to Farm” legislation. It allows farmers certain rights based on their business and longevity. Most importantly, it provides farmers/ranchers the opportunity to declare their land as agricultural use only and be taxed on that basis. A similar provision for estate taxes is also needed at the federal level. You could contact your U.S. Congress person to support this effort. It would help ensure that farms and ranches in your area continue to operate and purchase those trucks on your lot!
