WeVote
Log In

Bill

Bill

SF 59

A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.

2025-2026 Regular Session Introduced by Sandy Salmon

SF 59 allows retired farmers and those in pass-through entities to exclude net income from farm tenancy agreements, easing their tax burden and encouraging farming.

Subcommittee reassigned: Dawson, Bisignano, and Driscoll.
#corporations #farming #federaltaxes #income #incometaxes #landlordandtenant #leases #pass-throughentities #retirement
0
WeVote Research Nonpartisan
Bill Summary · SF 59

Summary of SF 59: Farm Tenancy Net Income Exclusion Act

Bill Information:
- Bill Number: SF 59
- Title: A bill for an act relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions.
- Status: Subcommittee reassigned: Dawson, Bisignano, and Driscoll.
- Introduced: January 16, 2025
- Classification: Bill
- Subject Areas: Corporations, Farming, Federal Taxes, Income Taxes, Landlord and Tenant, Leases, Pass-Through Entities, Retirement

Purpose and Intent

The primary purpose of SF 59 is to amend the existing tax code to expand the eligibility for a net income exclusion related to farm tenancy agreements. This bill aims to provide tax relief to individuals receiving income from farming activities, particularly those who are retired farmers or involved in pass-through entities.

Key Provisions

  1. Amendment to Tax Code:

    • The bill proposes to amend Section 422.7 of the Iowa Code, specifically subsection 14, paragraph e.
    • It allows net income from farm tenancy agreements to be excluded from individual income tax for individuals receiving income through various entities, including:
      • Disregarded entities
      • Partnerships
      • S Corporations
      • Trusts
      • Estates

  2. Eligibility Criteria:

    • Eligible individuals can claim the exclusion for net income derived from farm tenancy agreements, even if the income is received through distributions from the aforementioned entities.
    • The bill clarifies that net income accruing to a grantor trust or a disregarded entity is considered distributed to its sole owner if the owner has the right to withdraw or compel distribution of that income.

  3. Effective Date and Retroactive Applicability:

    • The bill is deemed of immediate importance and takes effect upon enactment.
    • It applies retroactively to January 1, 2024, for tax years beginning on or after that date.

Impact

  • Who is Affected:

    • The bill primarily benefits retired farmers and individuals involved in farming through pass-through entities, allowing them to exclude certain net income from their taxable income.
    • It aims to provide financial relief and encourage continued engagement in farming activities by easing tax burdens.

  • Potential Financial Implications:

    • By expanding the net income exclusion, the bill may lead to a reduction in state tax revenue from individual income taxes, although specific dollar amounts are not detailed in the bill.

Legislative Actions

  • March 3, 2025: Subcommittee reassigned to Dawson, Bisignano, and Driscoll.
  • January 28, 2025: Initial subcommittee assignment to Driscoll, Bisignano, and Dawson.
  • January 16, 2025: Introduced and referred to the Ways and Means Committee.

Sponsors

  • Primary Sponsor: Salmon

This summary provides an overview of SF 59, highlighting its intent, key provisions, and potential impacts on individuals involved in farming and agricultural activities.

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.