Supporting Innovation in Agriculture Act of 2025
The Supporting Innovation in Agriculture Act of 2025 creates a new nonrefundable tax credit, the Innovative Agricultural Technology Investment Credit (credit under section 48F), equal to 30% of the basis of qualified property placed in service for an innovative agricultural technology project. To qualify, projects must aim to produce, store, process, or package specialty crops using precision agriculture or controlled environment agriculture (CEA) and must be placed in service by December 31, 2035 (with construction beginning after January 1, 2025). The bill defines what counts as qualified property and what constitutes an innovative agricultural technology project, and it includes rules to prevent double benefits with existing grant programs. The credit is transferable (can be sold or assigned to another taxpayer) and includes an elective payment option to allow cash payment of the credit in certain cases. The bill would also make several conforming changes to the Internal Revenue Code to accommodate and integrate this new credit with existing credits and tax procedures. In short, the bill is intended to spur investment in high-tech agriculture—particularly in specialty crops—by offering a significant tax incentive for implementing advanced, data-driven, and automated farming technologies in precision agriculture and controlled environment systems.
Key Points
- 130% credit on qualified investments in innovative agricultural technology projects (section 48F). The credit is based on the basis (cost) of qualified property placed in service in the taxable year.
- 2Eligible property and projects. Qualified property includes tangible equipment, software, and related technology that is part of an innovative agricultural technology project. Projects must focus on specialty crops and use precision agriculture or controlled environment agriculture, with placement in service by 2035.
- 3Definitions of technology. The bill provides detailed definitions for controlled environment agriculture and precision agriculture technology to specify what kinds of systems and devices qualify (e.g., climate control, irrigation, sensors, software/AI, robotics, automated harvesting, UAVs, etc.).
- 4Special rules and interactions with other programs. Rules mirror certain pre-1990 depreciation-related provisions and include a denial of double benefits if grant funds (e.g., from Farm Security and Rural Investment Act or environmental quality incentives) were used for the property. The credit also interacts with other tax mechanisms, including adjustments to eligibility for related credits and basis computations.
- 5Transferability and elective payment. The credit can be transferred to another taxpayer, and there is an elective payment option allowing the credit to be paid out in cash under certain circumstances. There is also an optional election for certain taxpayers to treat themselves as an “applicable entity” for purposes of the cash-payment provisions.