For the first time, Illinois agritourism businesses may apply for a liability insurance tax credit. Feb. 28 is the application deadline for 2022 taxes.
Illinois is offering the tax credit because it doesn't offer limited liability insurance to agritourism operations and wants to help farmers and families grow these agribusinesses, said Hannah McGee, a grant administrator with Illinois Department of Agriculture's Bureau of Marketing, Promotion and Grants.
Eligible agritourism businesses may apply to receive a tax credit for 100% of their liability insurance premiums up to $1,000.
By Jan. 25, McGee said she had approved 40 applicants that will receive roughly $33,000 in tax credit for 2022 and certified another five applicants that will receive about $4,000 in tax credit for 2023 taxes. She wasn't certain how many agritourism businesses may apply for the insurance credit this year.
"We're wanting to spread the word," she said.
McGee outlined three criteria that determine eligibility for the liability insurance tax credit.
An agritourism business must be in Illinois and file Illinois income taxes. For those that also operate in a bordering state, the other state would not accept an Illinois tax credit, she noted.
The agritourism business must be operated on an agricultural property. McGee used an example of a business offering horse carriage rides. If a business offers rides only as wedding rentals, parades or town tours, that operation would not be considered an agritourism business. However, one that offers carriage rides on a farm would be considered an agritourism operation.
A farm must offer agritourism activities to qualify. For example, a farm that grows pumpkins must also offer a tourism activity, such as a u-pick option, corn maze or some educational activity.
McGee added the state law also specifies activities that are not considered agritourism. Those include hunting, fishing, amusement rides, rodeos, hiking and off-road motor vehicles and their related activities.
To apply online for the agritourism liability tax credit, visit illinoisagritourismcredit.com. Applicants will find a variety of information, including definitions and qualified activities.
To complete an online application, click on the icon on the bottom of the page. To receive a paper application, call 217-785-5710.
Applicants need to supply their tax identification or employer identification number (EIN). If a Social Security number is requested, McGee said an applicant needs to submit only the last four digits.
Applicants must specify which tax form they will use to file their Illinois income taxes and know about the liability insurance they pay. They must choose from a list of options the type of agritourism business they operate.
Applicants must upload proof of their liability insurance policy and proof they have made payments or paid their liability insurance.
Applications are processed within a week of being received. Approved applications receive an email certification and a paper copy in the mail.
Application questions may be emailed directly to firstname.lastname@example.org.
As for this year's state taxes, "the Illinois Department of Revenue (IDOR) is aware of the certificate and knows when they come in, it is to be expected," McGee said. "If any issues happen (when agritourism businesses) file and they get IDOR questions, the Illinois Department of Agriculture is working with IDOR." She recommended referring IDOR questions to email@example.com.
• This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.