Section 8803-H - Beginning farmer management tax credit.(a) General rule.--An owner of agricultural assets may take a credit against the tax due under Article III for the sale or rental of agricultural assets to a beginning farmer in the amount approved by the department. An owner of agricultural assets is eligible for allocation of a tax credit equal to:(1) Five percent of the lesser of the sale price or the fair market value of the agricultural asset, up to a maximum of $32,000; or(2) Ten percent of the gross rental income in each of the first, second and third years of a rental agreement, up to a maximum of $7,000 per year.(b)Application.-- (1) The tax credit may be claimed only after approval and certification by the department and is limited to the amount stated on the certificate issued under section 1804-H.(2) An owner of agricultural assets must apply to the department for approval of a tax credit, in a form and manner prescribed by the department. The application shall: (i) Identify the beginning farmer who has been certified by the department under paragraph (3) and to whom the agricultural assets are sold or rented; and(ii) Specify whether the beginning farmer is a brother, sister, ancestor or lineal descendant of the applicant.(3) A person may apply to the department for certification that the person is a beginning farmer for purposes of this article. The application shall be in a form and manner prescribed by the department and shall require that the applicant provide: (i) Projected earnings statements to demonstrate the profit potential for the farming conducted by the applicant.(ii) Verification that the farming conducted by the applicant will be a significant source of income for the applicant.(iii) Verification that the applicant will, if certified as a beginning farmer by the department, notify the department if the farmer no longer meets the certification and eligibility requirements within the three-year certification period, in which case eligibility for tax credits ends.(iv) Verification that the applicant is not engaged in farming by means of a joint business venture.(v) Verification and documentation as necessary to meet other eligibility requirements as may be established by the department. (c) Termination of rental agreement.-- (1) An owner of agricultural assets or beginning farmer may terminate a rental agreement for reasonable cause upon approval of the department.(2) If a rental agreement is terminated without the fault of the owner of agricultural assets, the tax credits shall not be retroactively disallowed.(3) In determining reasonable cause, the department shall consider which party was at fault in the termination of the agreement.(4) If the department determines the owner of agricultural assets did not have reasonable cause, the owner of agricultural assets must repay all tax credits received as a result of the rental agreement to the Commonwealth. The repayment is additional income tax for the taxable year in which the department makes its decision .(d)Duration of tax credit.--The credit is limited to the liability for tax as computed under Article III for the taxable year. The tax credit may not be sold, passed through, carried forward or refunded. No credits granted under this section shall be applied against any tax withheld by an employer from an employee under Article III.Added by P.L. TBD 2019 No. 65, § 1, eff. 8/31/2019.