A bill signed into law by Gov. Tony Evers will protect farmers from taking a double financial hit when their crops are damaged or cannot be planted due to weather or other natural causes. The Dairy Business Association, Wisconsin’s leading dairy lobbying group, applauded the governor along with the legislation’s authors for the bi-partisan effort. The new law adjusts the formula used to calculate the manufacturing and agricultural tax credit so that farmers can claim the full credit even though they receive federal crop insurance for the lost harvest. Without the change, farmers who lost revenue because of crop damage also had to pay more in taxes. This change will apply to tax filings for 2019. “The significance of this legislation is underscored by the experience of many of our farmers who lost crops or couldn’t plant them this past year because of extremely wet conditions,” said Tom Crave of Waterloo, president of the Dairy Business Association. “Federal crop insurance helps offset the losses, but without the change made today, those farmers would not have had the opportunity to claim the tax credit and would have essentially taken two losses. “We appreciate that our government leaders are attentive to issues that impact our dairy community and commit the time to understand how they can take practical steps toward improvements.” Prior to the change in the law, the definition of “production gross receipts” used to calculate the manufacturing and agricultural tax credit did not include crop insurance payments. Therefore, a farmer who lost all or portions of a crop not only lost proceeds from the sale of the crop but also had a significant reduction in allowable “production gross receipts” used in calculating eligibility for the tax credit. Crop insurance proceeds are counted as taxable income. This means a farmer who recouped part of the loss through a crop insurance payment might have had to pay income taxes on that reduced profit. Whereas, a farmer who planted, harvested and sold a crop would have been able to include proceeds for purposes of claiming the credit. Source - http://www.wdtimes.com