House committee considers tax incentives for farmers

March 10, 2000|By LAURA ERNDE

ANNAPOLIS - Farming is like climbing a mountain: When you get to the top, there's another mountain ahead, said Randy Sowers.

The Middletown, Md., farmer told a Maryland General Assembly committee on Thursday that proposed tax incentives would help farmers stay in an increasingly difficult business.

"Anything that'll help the bottom line look better has got to be a good thing," Sowers said.

The House Ways and Means Committee heard testimony on proposals by two local lawmakers Thursday.

Del. Christopher B. Shank, R-Washington, is asking the state to cut its capital gains tax on land sold into agricultural preservation.

"Some farmers have walked away from selling easements because of the capital gains tax. Saving agricultural land is what Smart Growth is all about," Shank testified.


The Maryland Department of Legislative Services estimated that the tax cut would cost the state $635,000 a year.

Del. Joseph R. Bartlett, R-Frederick/Washington, favors two more tax incentives. One is geared toward improving farm technology and the other would make it easier for farmers to hire and keep good workers.

The technology tax break would allow farmers to subtract the cost of those expenses from their taxable income. Current tax law spreads the credit over the life of the equipment.

Things such as Global Positioning Systems, computer equipment and high-tech weather equipment would be eligible for the subtraction, Bartlett said.

Carroll County, Md., farmer Melvin Baile Jr. said the current tax incentive encouraged him to purchase a no-till drill, which allows farmers to plant without causing the soil erosion that comes with plowing.

The Maryland Department of Legislative Services could not estimate the cost of the bill.

The Maryland Department of Budget and Management opposed it, arguing it would double the current tax credit. Bartlett said that was a misunderstanding.

An analyst estimated that Bartlett's other proposal, intended to help farmers and farm workers, would cost the state $1.9 million.

Bartlett said he wants to work with committee members to bring down the cost.

As proposed, farmers would be able to subtract from their state tax bill 1 percent of the wages paid to their 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 earn, he said.

Both Shank and Bartlett testified about the state's dramatic loss of farmland.

Small farms, especially, are being lost to development. If this continues at the current rate, there will be no small farms left by the year 2033, Bartlett said.

The bills are supported by the Maryland Farm Bureau and the Maryland Grange.

If approved by the Ways and Means Committee, the bills would have to be approved by the House of Delegates and Senate before the end of the legislative session on April 10.

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