12
Feb
New York Bill Highlights Significance of Tax Incentives for Organic Transition
(Beyond Pesticides, February 12, 2024) New York state Senator Patricia Canzoneri-Fitzpatrick (R-NY) introduced a bill (S1306) that would exempt farmland that is in transition to certified organic practices from real property tax for up to a three-year period. This bill was reintroduced in the state legislature at a time when many federal organic programs remain unfunded amid stalled Farm Bill negotiations (see here for previous Action of the Week calling on Congress to fund federal organic programs) and farmers continue to struggle with the cost of certification, paperwork, and access to land. The legislation recognizes the importance of supporting and incentivizing organic as a common good that protects health and the environment and saves taxpayer costs associated with,
- Externalities of chemical-intensive farming, from costs associated with fires, floods, and severe weather;
- Daily health and cleanup expenses associated with contamination of air, land, and water; andÂ
- Crop and productivity losses and depressed ecosystem services (including loss of pollinators).
The public is looking for opportunities to push forward holistic policies as executive orders suspend diversity, equity, and inclusion in federal agency staffing and programming, as well as the shuttering of government websites and databases mentioning climate change or environmental justice.
As Beyond Pesticides shifts gears into 2025, state legislation, like S1306, and grassroots-powered action have become more important in tackling the urgency of the health, biodiversity, and climate crises. Incentives to adopt organic practices are one effective way to address the crises by eliminating petrochemical pesticides and fertilizers that release greenhouse gases (carbon dioxide, nitrous oxide, and methane) and enhancing the health of soil microbial life, which enhances atmospheric carbon sequestration.
Background and Bill Analysis
This legislation is designed to establish criteria for the parameters of a “real property tax exemption†for organic or transitional organic farmers. There are several key features of this bill to consider, including the land eligibility for exemption and eligibility carveouts.
Key Features
- Eligibility for exemption is capped at three years;
- Participating farms must attain organic certification per National Organic Program (NOP) standards to remain eligible;
- In any given tax year, the real property tax exemption would either be capped at 50% of the total value of the farm operation in an agricultural district OR 50% of the total value of the farm operation eligible for an agricultural assessment;
- Land on the farm operation property must be in agricultural production to be eligible for each year; and
- Eligibility criteria for exemption can go beyond 50% cap for certified/transitional farmers in areas declared by governor as a “disaster emergency” in a given year.
Further Analysis
The legislation states, “[T]hat portion of the value of land of a farm operation which is in the process of being certified by an organic certification authority accredited by the United States department of agriculture for the production of organic crops, livestock and livestock products shall be exempt from real property taxation for a period not to exceed three years.†Eligible land must be certified organic by the end of this three-year period. Advocates welcome this language as it creates an incentive structure for farmers who may otherwise find financial considerations to be an impediment to transition.
The bill continues, “The land eligible for such real property tax exemption shall not in any one year exceed fifty percent of the total assessed value of such farm operation which is located on land used in agricultural production within an agricultural district or fifty percent of the total assessed value of such farm operation eligible for an agricultural assessment pursuant to this section and section three hundred six of this article where the owner of such land has filed an annual application for an agricultural assessment.â€
This legislation has been introduced in the New York State legislature in sessions going back to 2009, but has not moved out of committee.
The legislative language introduces flexible support systems into the legal code for farmers “located within an area which has been declared by the governor to be a disaster emergency in a year in which such tax exemption is sought and in a year in which such land meets all other eligibility requirements for such tax exemption set forth in this subdivision.†This flexibility comes in the form of permitting eligible organic farmers to have more than 50% of total assessed value exempted from property tax, per some further stipulations. For example, the eligible land cannot exceed the total acreage damaged or destroyed during that given disaster emergency declaration in specified area(s) of the state. Ultimately, the total acreage eligible for this exemption would be left up to the Commissioner of Agriculture.
Existing Support
Economists and organic advocates agree that developing an incentive structure to transition to and maintain organic certification is a critical barrier to widespread adoption given the high short-term costs associated with shifting land management systems.
Be it federally or statewide, there is much more incentive to engage in chemical-intensive farming and land management programs given the structure of federal crop insurance and other subsidy programs. (See previous Daily News here for further analysis here on the Federal Crop Insurance Program.) A research campaign spearheaded by researchers at New York University conducted a survey of organic farmers in the United States, providing critical feedback on modifying existing agricultural support programs in the Farm bill. (See Daily News here.)
Experts say that agricultural tax exemptions can “knock thousands off your property tax bill.†However, there are some barriers to consider, including whether the operation is full- or part-time, zoning rules, among other factors. In recent years there have been several changes in agricultural tax exemptions at the state-level, including new laws that went into effect in 12 different states in 2024, according to an analysis by the National Agricultural Law Center. Farmers will also be impacted if Congress allows provisions of the Tax Cuts and Jobs Act (TCJA) to sunset at the end of 2025. An analysis of the Act by the law firm Warner, Norcross, and Judd finds the effect of the expiring provisions will be two-fold:
- Income tax will be impacted, including a 15.6% increase (or $2,283) in tax liability for farms making between $150,000 and $350,000 in gross cash farm income. Farms earning over $5 million will see a 5.4% increase (or $27,588) going into 2026; and
- Estate and gift tax will be impacted, including slashing the current gift and estate tax exemption (13.61 million) in half going into 2026.
Call to Action
With federal regulations of pesticides expected to be curtailed under the Trump administration, advocates are activated and looking for opportunities to push the needle on eliminating toxic pesticide-dependent food and land management systems.
If you are a New York resident, consider reaching out to your elected official voicing your support for S1306. See Keeping Organic Strong to monitor updates, recommendations, and opportunities to engage in the Spring 2025 NOSB public meeting.
All unattributed positions and opinions in this piece are those of Beyond Pesticides.
Source: New York State Senate
