Sponsors (23)
The bill incentivizes modernization and resource‑efficient farming for specialty‑crop producers through a generous tax credit and cash‑out options, improving farm cash flow and environmental outcomes, while increasing federal revenue costs, adding administrative complexity, and leaving many non‑eligible farmers with little or no benefit.
Specialty-crop farmers and related small agricultural businesses receive a 30% tax credit that lowers upfront costs for precision and controlled‑environment agriculture equipment, making modernization more affordable.
Taxpayers (including small farms and non‑flow‑through entities) can elect a refundable payment or transfer the credit, improving cash flow and allowing entities that cannot use tax credits directly to monetize the benefit.
Farmers who adopt water‑saving and precision technologies (sensors, irrigation, software, AI) can reduce input costs and use resources more efficiently, delivering environmental benefits and lower operating costs.
The 30% credit expands federal tax expenditures and will reduce federal revenues, creating budgetary pressure that could crowd out other spending or require offsets.
Because the credit is nonrefundable by default, some small farms and other investors will realize much less benefit unless they use the refundable/transfer option, reducing the policy's reach for the smallest operators.
Complex eligibility rules, detailed definitions, and cross‑references to tax and USDA programs increase compliance costs and will require substantial IRS/USDA guidance and administration.
Based on analysis of 2 sections of legislative text.
Creates a 30% investment tax credit for qualifying precision- and controlled-environment agriculture property placed in service through 2035, effective for construction begun after Jan 1, 2025.
Official title: To amend the Internal Revenue Code of 1986 to establish a credit for investments in innovative agricultural technology.
Introduced February 27, 2025 by Mike Kelly · Last progress February 27, 2025
Creates a new federal investment tax credit equal to 30% of the basis of qualified property used in innovative agricultural technology projects that produce, store, process, or package specialty crops using precision agriculture or controlled‑environment agriculture. The credit applies to property placed in service before December 31, 2035 and generally to property the construction of which begins after January 1, 2025. Allows taxpayers (including non-flow-through taxpayers) to elect a refundable payment option for the credit and permits transferability under the existing transfer rules; includes definitions of qualified property and technology types, cross-references to existing tax rules to prevent double benefits, and makes conforming amendments to the Internal Revenue Code.