MO Urban Farm Tax Credits

Posted on June 6, 2023 by Alicia Alferman

In October of 2022, the State of Missouri approved tax credits for urban farms to encourage investments in establishing or improving urban farms and community gardens in urban areas across the state. The legislation was championed by Missouri State Senator Barbara Washington, who represents the 9th Senatorial District.  

“This tax credit will increase agricultural production and education in our urban communities where farming and food production has not been taught like it should have,” Sen. Washington told Northeast News. “I’m proud to have carried this legislation for the past five years and to finally see it cross the finish line.”  

In the Martin City Telegraph, former KCMO City Councilman John Sharp writes, “Current and future urban farmers in KCMO should have several opportunities to benefit from the tax credits since city ordinances allow many types of urban farming in much of the city.”  

The legislation allows taxpayers to receive income tax credits for up to 50% of their eligible expenses up to $5,000 for establishing or improving an urban farm or community garden that produces food for distribution to the public by sale or donation. The credit is for state taxes only (not federal) and the credit is not refundable. So, if your credit is $5,000 and your state taxes are $200, then you can only use $200. You can carry the excess forward and apply it to the succeeding three years. The total tax credits allowed for all taxpayers for any specific urban farm may not exceed $25,000 and the total statewide amount of urban farm tax credits not exceed $200,000 in any calendar year.  

If you would like to consult with a tax professional about how the Urban Farm Tax Credit could impact your business, we suggest Sarah Burnett Pierce with Moxie Tax Solutions. Sarah specializes in farm, small business, individual tax matters, and is a farmer herself. Paid consultations include individual projections to make use of the Urban Farm Tax Credit.