Bill
HB 3066
Illinois offers a 100% tax credit for distressed farmers on up to $50,000 of qualifying expenses (repairs, greenhouses, etc.), nonrefundable with 5-year carryforward, starting 2027.
Status (as of latest actions)
- Introduced: Feb 20, 2025 (Rep. Sonya M. Harper)
- House Amendment 001 filed: Mar 13, 2025 (amends/rewrites original text)
- House passed (third reading): May 15, 2025
- Companion: SB 1425
- Effective date for tax credit: taxable years beginning on or after January 1, 2027
Overview / Purpose
- The bill establishes tax relief targeted to "distressed farmers" by creating an Illinois income tax credit for qualifying farming expenses. The intent is to support smaller or otherwise disadvantaged farmers in covering capital and operating costs, and to encourage production delivered to underserved communities.
- Note: An earlier version of the bill would have created a Department of Agriculture grant program (apprenticeships, wells, equipment/repairs) subject to appropriation; House Amendment 001 replaces that original text and leaves the tax credit as the operative statutory language in the Illinois Income Tax Act.
Key provisions (current text after House Amendment 001)
- Distressed farmer credit (35 ILCS 5/235 new):
- Taxpayers who qualify as a "distressed farmer" and incur "qualified farming expenses" are eligible for a credit equal to 100% of those expenses, up to $50,000 per taxpayer per taxable year.
- The credit is nonrefundable (cannot reduce liability below zero). Excess credit may be carried forward up to 5 taxable years and is applied to the earliest year with tax liability.
- Effective for taxable years beginning on or after Jan 1, 2027.
Definitions / Eligibility (key terms)
- Distressed farmer:
- As amended: (i) a person who leases and is principally responsible for agricultural land and generates less than $500,000 per year in gross revenue; or (ii) a person who has been denied a Farm Service Agency (FSA) number despite 5 or more years of farming.
- (The original introduced version also included a threshold of fewer than 75 acres; that acreage cap was removed in the amendment.)
- Qualified farming expense:
- Repairing tractors, trailers, and other vehicles;
- Purchasing, repairing, or constructing greenhouses and other covers for agricultural products;
- Purchasing tractors with tillers and other attachments;
- Planting or harvesting food that will be delivered to an underserved community.
- Underserved community:
- A census tract meeting a poverty or median income threshold (20%+ households at/below federal poverty guidelines OR median family income ≤ 80% of area median) AND where at least 33% of the population lives more than 1 mile (metro) or more than 10 miles (non-metro) from a grocery store (as defined).
Implementation, administration, and fiscal considerations
- Administration: The tax credit will be administered under the Illinois Income Tax Act (Department of Revenue responsibilities implied). The originally proposed Department of Agriculture grant program was removed by House Amendment 001.
- Fiscal impact: The credit could reduce state income tax revenues materially depending on uptake (up to $50,000 per eligible taxpayer per year). No appropriation language is required for the credit itself, but administration and verification processes may create administrative workload for state agencies.
- Effective date for claiming credits: taxable years beginning on or after January 1, 2027.
Notable changes from original version
- Original bill text (as introduced) included a Department of Agriculture grant program (subject to appropriation): up to $5M for apprenticeships, $5M for wells, and $10M for other farmer expenses (repairs, greenhouses, equipment). House Amendment 001 removed/replaced that program and retained only the tax credit provisions in the Income Tax Act.
Practical effect
- Small-scale or otherwise disadvantaged farmers (per the bill's definition) could offset eligible capital and production expenses through a substantial (100%) tax credit up to $50,000 annually, with carryforward for unused amounts. The policy incentivizes equipment repair/purchase, greenhouse investment, and producing food for designated underserved areas, while potentially reducing state tax receipts.
Compiled from official sources — confirm details with the bill’s official record.
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