I 112th CONGRESS 1st Session H. R. 317 IN THE HOUSE OF REPRESENTATIVES January 19, 2011 Mr. Baca introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to allow a credit against tax for certain fruit and vegetable farmers.

1.

Short title

This Act may be cited as the Fresh Fruit and Vegetable Grower Tax Incentive Act of 2011.

2.

Fruit and vegetable small farm credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45S.

Fruit and vegetable small farm credit

(a)

Allowance of credit

For purposes of section 38, in the case of an eligible taxpayer, the fruit and vegetable small farm credit determined under this section for such taxable year is an amount equal to the lesser of— (1)$10,000, or (2)the taxable income of the taxpayer for the taxable year attributable to the trade or business of fruit and vegetable farming. (b)

Eligible taxpayer

For purposes of this section— (1)

In general

The term eligible taxpayer means any taxpayer— (A)who is engaged in the trade or business of fruit and vegetable farming, (B)with respect to whom at least 75 percent of taxable income attributable to the trade or business of farming for the preceding taxable year was attributable to fruit and vegetable farming, (C)whose gross receipts attributable to fruit and vegetable farming for the preceding taxable year are not more than $500,000, and (D)who is a farm-related taxpayer. (2)

Fruit and vegetable farming

The term fruit and vegetable farming means the farming and sale of fruits, vegetables, or both, in fresh form generally considered as perishable, but does not include any grains or any perishable fruits and vegetables which have been manufactured into articles of food of a different kind or character. (3)

Farm-related taxpayer

The term farm-related taxpayer means— (A)any farm-related taxpayer (as defined in section 464(f)(3)(B)), or (B)any corporation, partnership, or other entity, substantially all of which is owned by one or more farm-related taxpayers. (c)

Special rules

For purposes of this section— (1)

Aggregation rules

All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer. (2)

Estates and trusts

Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. (3)

Tax exempt organizations

No credit shall be allowed under section 38 for any fruit and vegetable small farm credit determined under this subpart to any organization which is exempt from tax under this chapter. (4)

Allocation in the case of partnerships

In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary.

. (b)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 45S. Fruit and vegetable small farm credit. . (c)

Conforming amendment

Subsection (b) of section 38 of such Code is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph: (37)the fruit and vegetable small farm credit determined under section 45S(a). . (d)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.