With governments across the country slashing funding in order to limit deficit spending in an era of falling revenues, a recently passed New Jersey bill would seek to challenge farm tax break abuses.
While several states and the federal government offer tax breaks to farmers engaged in agricultural production, these deductions have become controversial in recent years. With the real estate market’s collapse in 2008 and with the general economic decline, individuals across the country have taken advantage of agricultural tax breaks. In some instances, land speculators have bought up significant amounts of real estate and classified it as agricultural land in order to avoid high tax penalties. Some individuals raise a handful of animals on residential land in order to significantly lower their tax burden.
In New Jersey, current laws allow landowners to claim agricultural tax breaks if they generate $500 a year in revenue from agricultural sales. This threshold, lawmakers argue, is obscenely low, allowing individuals across the state (individuals who are not members of the agricultural sector) to benefit from farming tax breaks.
Legislation recently passed in the New Jersey legislature would increase the annual farm sales requirement to $1,000. While this is a step in the right direction, some organizations say, it does not do enough to combat tax fraud. According to the head of the New Jersey Sierra Fund, “Someone with a McMansion in Manalapan now just has to grow an extra 10 Christmas trees on their mansion.”
If the bill is signed by Governor Chris Christie, then it will go into effect by 2014.
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Written by: Justin Ellison / Farm Plus Staff Writer