The Department will audit accounting procedures to determine if the tax base properly reflects the taxable non-farm activity. The statute indicates that that portion of the tax base attributable to agricultural producing is exempt. A capital acquisition deduction shall be prorated on the basis of the percentage of use for the non-farm activity. The amendment exempts only that farm income of a person who is engaged in the cultivating, growing and harvesting of the agricultural goods, but does not include a person selling farm equipment and supplies. A corporate farmer can use the farmland preservation tax credit against the single business tax liability from a non-farm activity.
Any unused credit is refundable.
The agricultural production exemption is not an exemption for the person, but is an exemption for the activity of producing agricultural goods. A lessor leasing land to an agricultural producer is not engaged in an agricultural producing activity and would not qualify for the exemption.