Bills › 91st General Assembly
Relating to the farm tenancy net income exclusion available against the individual income tax, and including effective date and retroactive applicability provisions
Sponsored by Sen. Annette Sweeney (R)
Topics:AgricultureTaxesIncome taxes
Where it is now
- Done: IntroducedJanuary 14, 2025
- Done: SubcommitteeJanuary 22, 2025
- Stopped: Senate committeeDied when the General Assembly ended
- Next: Passes the Senate
- Next: House committeeFunnel: by March 20, 2026
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Died when the session ended The 2026 session adjourned on May 3, 2026, the General Assembly’s last regular session. Bills that didn’t pass both chambers died. What’s a funnel?
What’s in it
AI summary Retired farmers can now receive a tax break on income from farm leases even if that money passes through a business, trust, or estate first. This change applies to certain entities like S corporations and partnerships that were previously excluded from the tax break. It allows the income to be treated as if it went directly to the individual farmer.1
Read the official explanation
Current law excludes from the individual income tax a retired farmer’s total net income received pursuant to a farm tenancy agreement covering real property held by the retired farmer for 10 or more years, if the farmer materially participated in a farming business for 10 or more years. Under current law, net income from a farm tenancy agreement earned by an entity taxed as a partnership for federal tax purposes, an S corporation, or a trust or estate is not eligible for the farm tenancy lease income exclusion. This bill allows the net income from a farm tenancy agreement earned, received, or reported by an entity taxed as a disregarded entity, partnership for federal tax purposes, an S corporation, a trust, or estate to be eligible for the farm tenancy lease income exclusion in the same manner as if the net income received pursuant to a farm tenancy passes directly from the farm tenant to the eligible individual rather than passing to the eligible individual through an entity taxed as a disregarded entity, a partnership, an S corporation, a trust, or an estate. The bill allows net income accruing to a grantor trust or to a business entity that is a disregarded entity to be deemed to have been distributed to its sole owner to the extent the sole owner of such disregarded entity or trust has the right to withdraw or compel distribution of such net income. The bill takes effect upon enactment and applies retroactively to tax years beginning on or after January 1, 2024.
Senate subcommittee
Named January 22, 2025. It hasn’t reported yet.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Family tree
91st General Assembly
Earlier and later bills are matched by wording or an identical title.
Tried before
This idea has been filed in an earlier General Assembly. None became law, though one got through a chamber.
- HF 2503 Relating to the farm tenancy net income exclusion available against the individual income …90th General Assembly · Renumbered as HF 2666 · same titleCleared committee
- HF 2666 Relating to the farm tenancy net income exclusion available against the individual income …90th General Assembly · Passed House · same titlePassed a chamber
Similar bills this General Assembly
- HF 56 Relating to the farm tenancy net income exclusion available against the individual income …91st General Assembly · Renumbered as HF 624Nearly identical
Matched by wording or an identical title.