Renewal of agriculture tax credits advances in the House
JEFFERSON CITY, Mo. – Provisions to renew agriculture tax credit programs advanced in the House Thursday, passing unanimously through the Select Committee on Agriculture, and could see floor action this week. The three programs include the New Generation Cooperative Incentive Tax Credit Program, the Agricultural Product Utilization Contributor Tax Credit Program and the Qualified Beef Tax Credit Program.
“These three programs are accomplishing what they were created to do – drive economic growth for Missouri,” said Gary Wheeler, CEO of the Missouri Soybean Association. “We have a very positive return with minimal investment from the state. Especially when compared to the hundreds of millions of dollars issued under other tax credit programs with far less return per dollar, these three are making a difference for our state.”
The New Generation Cooperative Incentive Tax Credit program looks to boost investment in new generation cooperatives, which involve further processing of agricultural products and provide jobs and investment for rural Missouri, the program’s supporters say. Supporters also point to the credit as bringing in new investment. In the last 15 years, Missouri has received $170.1 million in direct and indirect benefits from an investment of $47 million in tax credits, a return of 261 percent.
The Agricultural Product Utilization Contributor Tax Credit Program funds the New Generation Tax Credit Program by issuing tax credits in exchange for cash contributions to the Missouri Agricultural Small Business Development Association. In FY 2015, $2.4 million in tax credits were sold, based upon $2.4 million in contributions received. 101 tax credits were issued. According to Missouri Soybean Programs, this program also brings a significant return to Missouri. Over the last 15 years, Missouri has received a return of 179 percent on its investment.
Finally, the Qualified Beef Tax Credit Program seeks to incentivize ownership of beef cattle by providing a 10 cent per pound tax credit to producers backgrounding or finishing cattle in Missouri. Producers are eligible for the credit for each additional pound of gain above their established baseline weight. Cattle have to be born and raised in Missouri to be eligible. While this program yields an estimated 396 percent return on investment, supporters say it is rarely utilized and HB 2632 would help increase access to the program.
“We are in a very challenging time for our state’s number one industry in with the market downturn for crop prices and agriculture,” Wheeler said. “These three programs are making a measurable difference for our state, and the bottom line is that it is a wise investment to renew these programs.”