Specialty Agricultural Crops Tax Credit Program
Description
The Missouri Agricultural and Small Business Development Authority provides Missouri tax credits to Missouri lenders who make loans for specialty crops farming resources to family farmers.
How does the Program work?
To participate in the loan program, a family farmer shall first obtain approval for a specialty agricultural crops loan from an eligible lender. The family farmer shall not be charged interest by the lender for the first year of the qualified specialty agricultural crop loan.
Upon approval of the specialty agricultural crops loan by a lender the loan documents to include:
- The Specialty Agricultural Crops Tax Credit application (Form S),
- Lender’s completed loan application, promissory note, amortization schedule, and security filings,
- Family farmer’s current financials (cannot be more than 6 months old),
- Projected global cash flow, post loan closing,
- List of farming resources purchased and cost for each
- Review Fee = 1.0% of loan amount
These shall be submitted to the Missouri Agricultural and Small Business Development Authority (MASBDA) for review and approval. MASBDA’s approval process shall take into consideration:
- The family farmer’s ability to repay the specialty agricultural crops loan,
- The purchase price of the farming resources must be appropriate for the type and quality of resources purchased,
- The general economic conditions of the area in which the family farmer is located, and
- Such other factors as the authority may establish based on individual loan’s characteristics.
Who is Eligible?
“Family Farmer” A farmer who is a Missouri resident and who has less than $100,000 in agricultural product sales per year.
“Lender” Any state or national bank, farm credit system, bank for cooperatives, federal or state chartered savings and loan association, federal or state building and loan association, or small business investment companies all of which must be subject to credit examination by an agency of the state or federal government.
The tax credit application must be received within 60 days of the date of the specialty agricultural crops promissory note.
Loan Amount and Terms
“Maximum eligible loan” cannot exceed 90% of the cost of purchasing specialty crops farming resources. The maximum loan amount is $35,000.
Tax Credit Amount
The maximum amount of tax credits that may be issued to all eligible lenders in any fiscal year cannot exceed $300,000.
The approved tax credit will be up to 100% of the approved first year’s interest waived on a qualified eligible loan.
Restrictions
Each family farmer shall be eligible for only one specialty agricultural crops loan per family.
The family farmer must be able to provide proof of citizenship, identity, and residence and complete the Certification of Citizenship/Immigration Status and Employer Status.
If the anticipated tax credit will be $5,000.000 or more and the family farmer has employees in connection with the specialty agricultural crops project, he/she must also provide proof of enrollment and participation in the federal work authorization program.
Fees
Review Fee = 1.0% of loan amount.
Other Information
MASBDA will issue the tax credit certificate after:
- Receiving a certification from the lender of the actual interest waived after the first year of the eligible loan. The interest due certification must be received no later than 30 days after the first year anniversary of the loan.
- Receiving a certification from the family farmer of the specialty crop sales resulting from the farming resources purchased from proceeds of the Specialty Agricultural Crops loan.