Farmland Preservation Credit

The Working Lands Initiative made significant changes to the Farmland Preservation Credit. The farmland tax relief credit was eliminated and the method for calculating the Farmland Preservation Credit has changed. There is no longer an income ceiling and the amount of the tax credit no longer depends on the claimant’s income or the size of the claimant’s property tax payment. The credits that are now available are:

• Farmland in a township or municipality that is zoned exclusive agriculture can qualify for a credit of $7.50 per acre.
• Farmland located in an agricultural enterprise area with a farmland preservation agreement signed after July 1, 2009, can qualify for a credit of $5.00 per acre.
• Farmland in an area zoned exclusive agriculture and located in an agricultural enterprise area can qualify for a credit of $10.00 per acre.
• Anyone with an existing farmland preservation credit will continue to qualify for the old credit until the farmland preservation agreement ends.

Landowners must be residents of Wisconsin and must meet other eligibility criteria to claim the credit. The criteria includes:

• Gross farm revenue of $6,000 in the past year or $18,000 in the past three years. Income from rental receipts of farm acres does not count toward gross farm revenue. However, gross farm revenue produced by the renter on the landowner’s farmland can be used to meet this eligibility requirement.
• All property taxes from the previous year have been paid.
• Farmers claiming farmland preservation tax credits must certify on their tax form that they comply with state soil and water conservation standards, including nutrient management and manure runoff standards. New claimants must also submit a certification of compliance with soil and water conservation standards that has been issued by the county land conservation committee.
• Acres claimed must be located in a farmland preservation area identified in a certified county farmland preservation plan. Eligible land includes agriculture land or permanent undeveloped natural resource areas or open space land that is: In an area certified for farmland preservation zoning, and/or Located in a designed agricultural enterprise area and under a farmland preservation agreement.

Compliance with the conservation standards will be monitored through inspection at least once every 4 years. If found out of compliance, a notice of noncompliance will be provided to DOR and the claimant is ineligible to claim a tax credit until compliance is re-established.

Ceasing program participation will result in a conversion fee equal to 3 times the class 1 “use value” of the land. This fee applies to areas with a certified farmland preservation zoning ordinance regardless of whether the landowner received a tax credit under the state program.