Washington,
Apr 22, 2005 -
As part of their ongoing efforts to protect Pennsylvania’s farmland and open space, Congressmen Jim Gerlach (PA-06) and Joe Pitts (PA-16) today met with local officials and area farmers to tout their plan to preserve farmland.
“This legislation ensures that tax relief is targeted at those farmers under the most pressure from development. Farmers in this area know all too well the costs of staying in farming. Our tax code shouldn’t add to that cost,” said Congressman Gerlach.
“We have worked together to introduce a bill that will remove a barrier in the tax code to farmland preservation. This bill capitalizes on the power of the market, not government mandates or wishful thinking,” said Congressman Pitts.
Current law allows a farmer to sell the development rights to his/her property to any person for the fair market value of the rights. The proceeds from the sale generally are subject to capital gain taxes. Capital gains and exorbitant estate taxes are forcing many farmers to sell their farms at higher rates to developers simply to make the sale worth the tax burden.
H.R. 658, The Family Farm Preservation Act, exempts the sale of farm development rights from capital gains taxes provided that the farmland is located in a county with a population of 100 persons or more per square mile and the sale is made to a qualified non-profit organization. According to data from the 2000 Census, H.R. 658 would benefit farmers in forty Pennsylvania counties and hundreds of others around the nation.
This tax burden often forces farmers to sell their farms to developers simply to pay the exorbitant estate and capital gains taxes. The Family Farm Preservation Act creates real incentives for farm owners to keep their farms intact.
