MARLBOROUGH, Mass. — Massachusetts Farm Bureau Federation (MFBF) applauds a recently redrafted version of H.3323 and S.1584, An Act to establish tax valuation for farms, coming out of the joint revenue committee. The bill was reworked with input from MFBF and has the full support of the organization.
This bill is critical for the agricultural community in Massachusetts as the estate tax that is levied in the Commonwealth is based on the “highest and best use” of the land, which typically is the development value of the land. This has been a proven challenge for many farmers inheriting farmland, who want to continue to farm the land, rather than develop it. Often, they do not have cash on hand to pay the estate tax and are forced to sell some or all the land to pay the tax.
As such, this bill would value farmland at the agricultural value for estate tax purposes, with the caveat that it must be in agriculture for at least 10 years to fully enjoy this benefit. If the land is developed within 10 years, back taxes would need to be paid as well as an elevated capital gains tax.
“The idea for this bill actually came out of a County Farm Bureau legislation breakfast,” said MFBF President Ed Davidian, who farms in Northborough. “An individual came forward with concerns about inheriting farmland and being taxed at the development value. Upon hearing this, Representative Kate Hogan took this issue under her wing and brought it forward in this bill. She has been an excellent champion for the bill.”
“I believe that momentum is building on Beacon Hill this session to protect the family farm,” said Representative Kate Hogan (D-Stow). “This is common-sense legislation that would make a real difference for our agricultural community. Small farms are an integral part of our state’s economy and food system and, particularly today, as residents are drawn more and more toward healthier, locally sourced ingredients, it’s important we ensure that family farms in the Commonwealth remain viable and able to continue to grow fresh food and produce.”
According to the 2012 U.S. Department of Agriculture farm census, there were 523,517 acres of Massachusetts farmland that year, a decrease from the 577,637 acres recorded in 1997 but an increase over the 2007 census. Over the same period, the average size of a farm decreased from 79 acres to 68 acres. There were 113 farms of 500 acres or more.
“Young farmers across the Commonwealth are very excited about this bill,” said MFBF Young Farmer and Rancher Chair Heidi Cooper, who is a farmer in Rochdale. “It is a step in the right direction for preserving the family farm in Massachusetts.”
This bill has now moved to the House Committee on Ways and Means, where it will be evaluated in terms of its fiscal impact to the state.
—Massachusetts Farm Bureau Federation
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