State Sen. Judy Schwank (D-Berks) introduced legislation to reinstate a decades old program that exempts agricultural conservation easements from Pennsylvania’s Realty Transfer Tax.
The proposed bill would provide exemptions for 270 farms impacted by a 2014 administrative rule change, helping save farmers more than $1.3 million.
“For generations, farmers and their families have had an expectation that property sold for agricultural easement would be sheltered from any real estate transfer taxes,” Schwank said. “While the amount of revenue in question may seem minuscule, the impact felt by farmers and their families is significant and could influence whether or not farmers continue to enroll in the program.”
For three decades agricultural easement transfers were not subject to the Realty Transfer Tax collected by the state Department of Revenue. The 2014 department ruling reversed that exemption, subjecting farms statewide to the Realty Transfer Tax.
Though changed earlier this year, the legislation, Act 84, failed to make the exemption retroactive to the department’s ruling. As a result, the department continues to collect the Realty Transfer Tax from farmers who settled land transfers from approximately mid-2015 to the present.
In many instances, farmers transferring property have entered settlement unaware of taxes due and in extreme cases were charged the Realty Transfer Tax plus interest.
Schwank said that the proposed legislation clarifies the original intent of Act 84, provides much needed tax relief and eliminates confusion over taxes owed between farmers and the department.
