Missouri Senate advances farm tax credit measure

Associated Press WriterJEFFERSON CITY, Mo. (AP) -- The Senate gave preliminary approval Tuesday to a bill intended to make tax credits more valuable for corn growers and other farmers.

The legislation by Sen. David Klindt targets tax credits that farmers receive for investing in value-added agriculture projects, such as ethanol or biodiesel production.

Because farmers often have little tax liability, especially when starting a new venture, many recipients sell the tax credits to businesses or others as a way to get money upfront. The purchasers then redeem the credits for a dollar-for-dollar reduction on their state income taxes.

The tax credits have been around for a few years, but the bill broadens how they can be redeemed.

The legislation would allow the credits to be applied on a quarterly basis, which could make them more attractive to potential buyers, and would allow the credits to be applied to the three previous tax years. Currently, the credits can be used for up to five years after they are received.

"This bill gives the producers additional flexibility because it gives buyers of the tax credits additional flexibility," said Fred Stemme, a spokesman for the Missouri Corn Growers Association.

Klindt, R-Bethany, said the tax credits nourish growth in the agricultural sector.

But some senators were skeptical.

"It sounds to me like all we're doing is allowing the state to lend people money to invest in private enterprise, and then the rest of us pick up the tab," said Sen. Ken Jacob, D-Columbia.

Gov. Bob Holden vetoed legislation last year that would have allowed credits to be taken on a quarterly basis, and the Legislature failed to override his veto.

The bill also allows farmers to form "growers' districts" with the idea of creating agricultural products for use in the pharmaceutical industry.

The legislation needs another Senate vote to move to the House.

------Agriculture tax credit bill is SB740.

On the Net:

Missouri Legislature: http://www.moga.state.mo.us