Cutler’s Exemption of Family Farms From Realty Transfer Tax Heads For Final Approval
6/30/2012
HARRISBURG – Legislation authored by Rep. Bryan Cutler (R-Peach Bottom) that would exempt transfers of family farms for corporate liability reasons from the realty transfer tax is on its way to Gov. Tom Corbett’s desk, after the Senate gives final approval.

“Applying the realty transfer tax to family farm transactions which are performed for corporate liability reasons is exactly the kind of policy driving family farms out of Pennsylvania,” said Cutler. “Agriculture is Pennsylvania’s No. 1 industry. As we are looking for ways to preserve farms and farmers, we must do away with tax policies that unfairly target agriculture.”

House Bill 761 reverses a policy change enacted during the Rendell administration which allows the state to collect taxes from a farm owner who reorganizes his or her agricultural business for corporate liability reasons. Cutler’s legislation would exempt the transfer of real estate devoted to agriculture from the realty transfer tax if it is for the purpose of business reorganization.

A 2000 court decision established the principle that a conveyance of realty owned by a general partnership to a “succeeding” limited partnership would not be considered a “transfer of realty” if the partners and proportionate share of ownership interests among the partners remains the same.

“The courts in 2000 set the precedent that these types of conveyances should not be subject to the realty transfer tax,” said Cutler. “This is not just about protecting farms and farmers, but it is mainly about applying Pennsylvania’s tax standards fairly across the board.”

House Bill 761 would exclude from the realty transfer tax the transmission of real estate devoted to agriculture if the transfer is to a family farm, general, limited or limited-liability partnership by a member of the same family and the family directly owns at least 75 percent of the interests in the partnership. It also would exempt a transfer between members of the same family of an ownership interest in a real estate company, family farm corporation, general, limited or limited-liability partnership which owns real estate.

The legislation, which was amended in the Senate to include several other tax reform proposals, will now go back to the Senate before being presented to the governor for his signature.

More information about Cutler and his legislative priorities is available at www.RepCutler.com or www.Facebook.com/RepBryanCutler.

State Representative Bryan Cutler
100th District, Pennsylvania House of Representatives
Media Contact: Nicole Wamsley
nwamsley@pahousegop.com
717.783.8063
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