HB 1015 — Agricultural best management practices & agricultural equipment purchase tax credits; sunset date.

SESSION ENROLLED VIRGINIA ACTS OF ASSEMBLY ––-- 2024 SESSION CHAPTER E212 An Act to amend and reenact §§ 58.1-337, 58.1-339.3, 58.1-436, and 58.1-439.5 of the Code of Virginia, sunsetrelating date.agriculturalto agricultural best management practices tax;

agricultural equipment purchase tax Rredit;credit;

Osunset [Hdate. 1015] L Approved L Be it enacted by the General Assembly of Virginia:

E[H 1.1015] Approved March 28, 2024 Be it enacted by the General Assembly of Virginia:

That1. §§ 58.1-337, 58.1-339.3, 58.1-436, and 58.1-439.5 of the Code of Virginia are amended aDd ree§ 58.1-337.

That §§ 58.1-337, 58.1-339.3, 58.1-436, and 58.1-439.5 of the Code of Virginia are amended and reenacted as follows:

§ 58.1-337.

For taxable years beginning on or after January 1, 2021, but before January 1, 2026 2030, any individual engaged in agricultural production for market who has in place a soil conservation plan approved by the local soil and water conservation district and is implementing a nutrient management plan developed by a certified nutrient management planner in accordance with § 10.1-104.2 by thethement required tax return filing date of the individual shall be allowed a refundable credit against the tax imposed by § 58.1-320 of an amount equaling 25 percent of all expenditures made by such individHalindividual for the purchase of equipment certified by the Virginia Soil and Water Conservation Board as re1ucingreducing soil compaction such as a "no-till" planter, drill, or other equipment or equipment that provides more precise pesticide and fertilizer application or injection.

The equipment shall be diva.divided into the following categories:

a.

If the amount of the credit exceeds the taxpayer's liability for such taxable year, the excess may be refunded by the Tax Commissioner.

Tax credits shall be refunded by the Tax Commissioner on behalfybehalf be of the Commonwealth for 100 percent of face value.

productionB. for market who has in place a nutrient management plan approved by the local soil andral water conservation district by the required tax return filing date of the individual shall be allowed a credit against the tax imposed by § 58.1-320 of an amount equaling 25 percent of all expenditures made by such individual for the purchase of equipment certified by the Virginia Soil and Water Conservation Board as providing more precise pesticide and fertilizer application.

Virginia1. Polytechnic Institute and State University and Virginia State University shall provide at the request of the Virginia Soil and Water Conservation Board technical assistance in determining appropriate specifications for certified equipment which would provide for more precise pesticide and fertilizer application to reduce the potential for adva.

For taxable years beginning before January 1, 2021, any individual engaged in agricultural production for market who has in place a nutrient management plan approved by the local soil and water conservation district by the required tax return filing date of the individual shall be allowed a credit against the tax imposed by § 58.1-320 of an amount equaling 25 percent of all expenditures made by such individual for the purchase of equipment certified by the Virginia Soil and Water Conservation Board as providing more precise pesticide and fertilizer application.

Virginia Polytechnic Institute and State University and Virginia State University shall provide at the request of the Virginia Soil and Water Conservation Board technical assistance in determining appropriate specifications for certified equipment which would provide for more precise pesticide and fertilizer application to reduce the potential for adverse environmental impacts.

The equipment shall be divided into the following categories:

a.

divided into the following categories:

of 5 c.

of 4 d.

For purposes of this section, the amount of any credit attributable to agricultural best management practices by a pass-through entity such as a partnership, limited liability company, or electing small of 5 business corporation (S Corporation) shall be allocated to the individual partners, members, or shareholders in proportion to their ownership or interest in such entity.

E E.

A pass-through tax entity, such as a partnership, limited liability company or electing small business corporation (S corporation), may appoint a tax matters representative, who shall be a general partner, member-manager or shareholder, and register that representative with the Tax CommissioRer.Commissioner.

of 4 The Tax Commissioner shall be entitled to deal with the tax matters representative as representative of the taxpayers to whom credits have been allocated by the entity under this article with respect to those credits.

In the event a pass-through tax entity allocates tax credits arising under this article to itseits partners, members or shareholders and the allocated credits shall be disallowed, in whole or in part, such that an assessment of additional tax against a taxpayer shall be made, the Tax Commissioner shall first make written demand for payment of any additional tax, together with interest and penalties, from the tax matters representative.

In the event such payment demand is not satisfied, the Tax CommissiEnerCommissioner shall proceed to collection against the taxpayers in accordance with the provisions of Chapter 18 (§ 58.1-1800 et seq.).

D § 58.1-436.

corporationA. engaged in agricultural production for market which has in place a soil conservation plany approved by the local soil and water conservation district and is implementing a nutrient management plan developed by a certified nutrient management planner in accordance with § 10.1-104.2 by the required tax return filing date of the corporation shall be allowed a refundable credit againstHthe tax imposed by § 58.1-400 in an amount equaling 25 percent of all expenditures made by such corporation for the purchase of equipment certified by the Virginia Soil and Water Conservation Board as re0ucing soil compaction such as a "no-till" planter, drill, or other equipment or equipment that provid5s more precise pesticide and fertilizer application or injection.

For1. purposes of this section, equipmRnt that reduces soil compaction includes equipment utilizing guidance systems to control traffic patterns that are designed to minimize the disturbance of soil in planting crops, including such planters, drills, or other equ2.

For taxable years beginning on or after January 1, 2021, but before January 1, 2026 2030, any corporation engaged in agricultural production for market which has in place a soil conservation plan approved by the local soil and water conservation district and is implementing a nutrient management plan developed by a certified nutrient management planner in accordance with § 10.1-104.2 by the required tax return filing date of the corporation shall be allowed a refundable credit against the tax imposed by § 58.1-400 in an amount equaling 25 percent of all expenditures made by such corporation for the purchase of equipment certified by the Virginia Soil and Water Conservation Board as reducing soil compaction such as a "no-till" planter, drill, or other equipment or equipment that provides more precise pesticide and fertilizer application or injection.

For purposes of this section, equipment that reduces soil compaction includes equipment utilizing guidance systems to control traffic patterns that are designed to minimize the disturbance of soil in planting crops, including such planters, drills, or other equipment that may be attached to equipment already owned by the taxpayer.

2.

d.

Manure applicators;

For purposes of this subsection, the amount of any credit attributable to the purchase of equipment certified by the Virginia Soil and Water Conservation Board as reducing soil compaction or providing more precise pesticide and fertilizer application or injection by a partnership or S corporation shall be allocated to the individual partners or shareholders in proportion to their ownership or interest in theethe partnership or S corporation.

Virginia Polytechnic Institute and State University and Virginia State University shall provide at the request of the Virginia Soil and Water Conservation Board technical assistance in determining appropriate specifications for certified equipment which would provide for more precise pesticide and fertilizer application to reduce the potential for adverse environmental impacts.

The equipment shall be divided into the following categories:ntialcategories: for a.

a.

of 5 b.