Bartlett, Shank propose tax breaks for farmers

February 02, 2000|By LAURA ERNDE

ANNAPOLIS - Two local lawmakers are asking the Maryland General Assembly to give tax breaks to farmers.

Del. Chris Shank, R-Washington, wants to cut the capital gains tax on land sold into agricultural preservation.

Del. Joseph Bartlett, R-Frederick/Washington, is proposing two tax incentives, one geared toward improving farm technology and the other at making it easier for farmers to hire and keep good workers.

Shank said his idea came out of a forum he hosted for local farmers in December.

The state gives farmers money to preserve their land but takes back a substantial portion in taxes, Shank learned from Ringgold farmer John Herbst.

"It sort of puzzled me. It's sort of like a shell game. It's the state's policy to preserve this agricultural land, but on the other hand we're going to tax farmers," he said.


Herbst said he's glad Shank is pursuing the legislation.

"I think it would be an incentive to get more land in preservation if it weren't for the tax," he said.

Nearly 400 acres of Herbst's dairy farm are being preserved through the Maryland Farmland Preservation program. The program purchased the development rights on part of the farm five years ago and is in the process of buying the rest, he said.

Any gains realized from the sale are added to a farmer's state taxable income for that year. Shank's bill would subtract the gains.

It would apply to land preserved through Rural Legacy, Maryland Environmental Trust, Maryland Agricultural Land Preservation Foundation, any county agricultural land preservation programs or the Maryland Historical Trust.

Bartlett hopes his two incentives would allow more farmers to stay in business during the hard economic times the industry faces.

"Even in a climate such as we have today, when just about every industry is doing fantastically, farmers are having a tough time of it," he said. "I think we need to provide them with some kind of relief."

Bartlett's technology tax break would allow farmers to subtract the cost of those expenses from their taxable income.

Global Positioning Systems, computer equipment and high-tech weather equipment would be eligible for the subtraction, he said.

His employment incentives would help farmers as well as farm workers, he said.

"I grew up on a farm, and I worked for a lot of farmers when I was young. It's difficult to attract workers to the farm industry," Bartlett said.

Farmers would be able to deduct from their state tax bill 1 percent of the wages paid to employees. The credit would be capped at $80,000 in wages, an $800 subtraction.

Farm workers would be able to reduce their taxable income by 20 percent of the farm wages they earned, he said.

Herbst said he isn't familiar with Bartlett's tax incentive ideas but said they sounded promising.

"I think anything that would help the farmer would be appreciated," Herbst said.

Priscilla Harsh, president of the Washington County Farm Bureau, wanted to find out more about the legislation before commenting.

Both Shank and Bartlett are waiting for the state to calculate how much their tax breaks would cost the state in lost revenue. The bigger the price tag, the more difficult it will be to pass the legislation.

The bills, once they are filed, will be reviewed by the House Ways and Means Committee. Both Bartlett and Del. Bob McKee, R-Washington, are on that committee.

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