What would New York be without its farmers and farm businesses? Much of the state’s tourism sector and economy rely on agriculture and the farmers who work day and night to keep the industry strong. But, as anyone who has experience in the industry knows, farming is anything but easy. Operating a farm requires endless labor, financial investment, and planning. On top of that, farmers deal constantly with a range of challenges including weather events, diseases and pests, high costs of equipment, and labor shortages, to name just a few. To survive in the business of farming, you need to be resilient—but you also need support. New York recognizes the critical role that agribusiness plays in the state’s economy, and because of that offers various tax incentives to support farmers and their businesses. Here are just a handful of the tax credits, exemptions, and modifications available to farmers in New York.

Tax Credits

• Farm Workforce Retention Credit: Farm employers and owners of farm employers with an eligible farm employee (employed at least 500 hours) may qualify for a credit of $1200 per employee.
• Investment Tax Credit: Eligible farms that place qualified property (i.e., machinery, buildings, or equipment) into service during a tax year may qualify to claim 20% of the cost.
• Farm Employer Overtime Credit: New as of 2024, eligible farmers who pay their employees eligible overtime may be entitled to this credit.
• Alcoholic Beverage Production Credit: Farmers who are registered distributors of alcoholic beverages and produce a certain amount of beer, cider, wine, or liquor in New York during the tax year may be eligible for this tax credit.
• Conservation Easement Credit: Farmers who own land that is subject to a conservation easement that is held by a public or private conservation agency may be entitled to this refundable credit.
• Excelsior Job Program Tax Credits: Agricultural operations in New York that create at least five new jobs may be eligible for Excelsior jobs tax credits, investment tax credits, research and development tax credits, real property tax credits, and child care services tax credits.

Property Tax Exemptions

Depending on the local taxing jurisdiction, property tax exemptions may be available for farmers for new or reconstructed farm buildings and increases in assessed valuation on historic barns. Farmers may also be eligible for property tax relief through an agricultural assessment.

Sales Tax Exemptions and Refunds

Farmers and commercial horse boarding operators are exempt from paying state and local sales and use taxes for certain purchases. These purchases include farm machinery, equipment, supplies, computers, certain vehicles, building materials, certain services, and utilities used in farm production or operation. Farmers and commercial horse boarders can also apply for a refund of sales tax paid on motor fuel and highway diesel motor fuel used in farm production or operation.

Tax Modifications

Farmers or farm businesses with less than $250,000 in net farm income may be able to subtract 15% of that income included in federal adjusted gross income.

Conclusion

These are just a sampling of the economic incentives available to farm businesses in New York (not an exhaustive list). To learn about other financial resources and opportunities for farmers through the State, you can visit the Department of Taxation and Finance website or—better yet—speak with a local Certified Public Accountant for personalized guidance.