Booker, Stabenow, Warnock, Smith Introduce Legislation Eliminating Tax Liability for IRA Assistance for Distressed Farmers

WASHINGTON, D.C. – Today, U.S. Senators Cory Booker (D-N.J.), Debbie Stabenow (D-MI), Raphael Warnock (D-GA), and Tina Smith (D-MN), all members of the Senate Committee on Agriculture, Nutrition, and Forestry, introduced the Family Farmer and Rancher Tax Fairness Act, legislation that would remove the tax liability for distressed farmers for the assistance provided in Sections 22006 and 22007 of the Inflation Reduction Act (IRA). Currently, farm loan borrowers who are already at financial risk are facing tax liability on the IRA assistance.

“The critical financial assistance we fought to include in the Inflation Reduction Act is a lifeline for distressed farmers around the country,” said Senator Booker. “But now those same farmers are facing a burdensome tax liability. Congress needs to quickly cut these taxes to ensure that farmers who received assistance stay on the path back to financial stability.” 

“I fought to include relief for Georgia’s distressed farmers in the Inflation Reduction Act so they can stay on their land and keep operating at full force to feed our country and support our local economies,” said Senator Reverend Raphael Warnock. “I’m proud to join my colleagues to ensure that farmers in Georgia who received much-needed economic relief are not hit with an unexpected tax bill.”

“Our farmers and agriculture sector are the backbone of Minnesota’s diverse economy,” said Senator Smith. “As a member of the Senate Agriculture Committee, I am always looking for ways to support underserved farmers in Minnesota including Black, Hmong, Latino and Native American farmers. This legislation would clarify that IRA investments for disadvantaged farmers are tax free, which will help level the playing field and ensure everyone has equal access to financial services and other critical federal programs.”

Section 22006 of the IRA authorizes payments to distressed farm loan borrowers, particularly those borrowers whose agricultural operations are at financial risk. Section 22007 of the IRA provides much-needed financial assistance to Black farmers and others who have suffered discrimination through USDA’s farm lending programs. Distressed borrowers with qualifying USDA farm loans have already received nearly $800 million in assistance as part of the $3.1 billion for distressed farm loan borrowers provided through Section 22006, and these farmers are now facing the imminent threat of hundreds of millions of dollars of IRS tax liability if Congress does not act. The Family Farmer and Rancher Tax Fairness Act exempts these payments from federal income taxes.

The legislation is supported by the following groups: National Farmers Union, Farm Action Fund, Farm Aid, Federation of Southern Cooperatives, Intertribal Agriculture Council, National Family Farm Coalition, Pennsylvania Farmers Union, Rural Advancement Foundation International-USA, Rural Coalition, USDA Coalition of Minority Employees, Justice for Black Farmers Group, Black Belt Justice Center, Black Farmers of Chilton County, Black Farmers and Agriculturalists Association, Mississippi Minority Farmers Alliance, Reed-Wright Black Farmers Coalition, African American Agriculturalist Association, Brown Family Farm, Sustaining Environments Through Education and Economic Development, Inc. (SEED),  Independent Black Farmers, African American Agriculture Association, Black Men in America, Cowtown Foundation, No Fear Coalition, Acorn8 and Coalition for Change, Inc.

The full text of the Family Farmer and Rancher Tax Fairness Act can be found here.