HB2680: Milk production; creates an income tax credit.

HOUSE BILL NO. 2680

Offered January 14, 2019
A BILL to amend the Code of Virginia by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered § 58.1-439.12:13, relating to milk production tax credit.
Patron-- Wilt

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 58.1-439.12:13 as follows:

§ 58.1-439.12:13. Milk production tax credit.

A. As used in this section, unless the context requires a different meaning:

"Qualifying farm" means a dairy farm that possesses a Grade A permit issued by VDACS and has voluntarily implemented (i) a nutrient management plan that has been approved by, or is currently being reviewed by, the Department of Conservation and Recreation or (ii) a resource management plan and been certified as having implemented the plan by, or be in the process of having the plan reviewed by, the Department of Conservation and Recreation or a local soil and water conservation district.

B. For taxable years beginning on and after January 1, 2019, but before January 1, 2024, a taxpayer who owns a qualifying farm shall be allowed a credit against the tax levied pursuant to § 58.1-320 or 58.1-400 for selling USDA Class I or Class II milk at a price that is less than the producer price determined each month by the State Milk Commission. The amount of the credit shall equal:

1. $1,000 per million pounds for the first seven million pounds of milk sold below the producer price;

2. $500 per million pounds of milk sold below the producer price for amounts greater than seven million pounds but not greater than 20 million pounds;

3. $200 per million pounds of milk sold below the producer price for amounts greater than 20 million pounds but not greater than 50 million pounds; and

4. $100 per million pounds of milk sold below the producer price for amounts greater than 50 million pounds but not greater than 90 million pounds.

C. The amount of the credit allowed under this section shall not exceed the taxpayer's liability for taxes imposed by this chapter for the taxable year in which the milk was produced. If the amount of credit allowed exceeds the taxpayer's tax liability for such taxable year, the amount that exceeds the tax liability may be carried over for credit against the income taxes of the taxpayer in the next five taxable years or until the total amount of the tax credit has been taken, whichever is sooner.

D. Credits granted to a partnership, electing small business corporation (S corporation), or limited liability company shall be allocated to the individual partners, shareholders, or members, respectively, in proportion to their ownership or interest in such business entity.

E. The Department of Taxation, in consultation with the Department of Agriculture and Consumer Services and the Department of Conservation and Recreation, shall develop guidelines for claiming the credit provided by this section. Such guidelines shall be exempt from the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).