HR 1705
Supporting Innovation in Agriculture Act of 2025
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Bill overview
The Supporting Innovation in Agriculture Act of 2025 creates a tax credit for investments in innovative agricultural technologies. Specifically, it offers a 30% credit for qualified investments in projects using precision agriculture or controlled environment agriculture to produce specialty crops. The bill defines key terms like ‘precision agriculture’ and ‘controlled environment agriculture’ and establishes rules for determining qualified investments and preventing double benefits from existing grant programs. It also allows for the transferability of the credit and makes conforming amendments to relevant tax code sections.
Key provisions
- Provides a 30% tax credit for investments in innovative agricultural technology projects.
- Defines ‘precision agriculture’ and ‘controlled environment agriculture’ for credit eligibility.
- Specifies eligible property for the credit, including equipment, software, and construction.
- Limits the projects to the production of specialty crops using precision or controlled environment agriculture.
- Prevents double benefits from existing grant programs related to renewable energy or environmental incentives.
- Allows for the transferability of the credit.
- Makes changes to tax code sections to conform with the new credit provisions.
- Establishes an effective date of January 1, 2025, for the credit.
Who is affected
- Farmers and agricultural businesses
- Technology developers in the agricultural sector
- Taxpayers investing in agricultural technology
Sponsors
Official sponsors from legislative records.
Primary sponsor
Cosponsors
Doug LaMalfa
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119th CONGRESS — 1st Session
H. R. 1705
IN THE HOUSE OF REPRESENTATIVES
A BILL
To amend the Internal Revenue Code of 1986 to establish a credit for investments in innovative agricultural technology.
This Act may be cited as the Supporting Innovation in Agriculture Act of 2025
.
Subpart E of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 48E the following new section:
For purposes of section 46, the innovative agricultural technology investment credit for any taxable year is an amount equal to 30 percent of the qualified investment for such taxable year with respect to any innovative agricultural technology project.
For purposes of subsection (a), the qualified investment with respect to any innovative agricultural technology project for any taxable year is the basis of any qualified property placed in service by the taxpayer during such taxable year which is part of an innovative agricultural technology project.
For purposes of this section, the term qualified property
means property—
tangible personal property, whether or not affixed to real property (including equipment, systems and their components, materials, machinery, accessories, and structural components), which is used as an integral part of an innovative agricultural technology project, or
software, a computer system, or similar technology,
with respect to which depreciation (or amortization in lieu of depreciation) is allowable, and
the construction, reconstruction, or erection of which is completed by the taxpayer, or
which is acquired by the taxpayer if the original use of such property commences with the taxpayer.
The term innovative agricultural technology project
means an agricultural technology or system—
which is placed in service before December 31, 2035, and
for which the primary purpose is to produce, store, process, and package specialty crops (as defined in section 3 of the Specialty Crops Competitiveness Act of 2004) using—
precision agriculture, or
controlled environment agriculture.
Rules similar to the rules of subsections (c)(4) and (d) of section 46 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) shall apply for purposes of subsection (a).
Rules similar to the rules of section 48(d) shall apply for purposes of this section with respect to—
any renewable energy system, energy efficiency improvement, or equipment or system purchased, made, or installed using a grant provided under section 9007(c) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8107(c)), or
any physical improvement to land made using a payment provided under the environmental quality incentives program established under subchapter A of chapter 4 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.).
In this section—
The term controlled environment agriculture
means a closed, indoor agricultural production system using controlled environment agriculture technology in which the environment and inputs can be controlled throughout the lifecycle of a crop.
The term controlled environment agriculture technology
means any technology (including equipment, systems and their components, materials, and accessories that are necessary for the deployment of such technology) that is required to create, support, and maintain the necessary growing environment for plants and directly contributes to the efficient production, harvesting, processing, or packaging of agricultural products and goods, including—
heating, cooling, thermal screening, humidification, dehumidification, and air circulation systems,
horticultural lighting systems and glazing materials,
irrigation and water treatment and filtration systems,
nutrient delivery and management,
software, including data management software, advanced analytics, machine learning systems and artificial intelligence systems, designed as part of or sold in connection with controlled environment agriculture technology,
robotics, conveyance, and automation systems, including automated storage and retrieval equipment,
automatic harvesting, seeding, transplanting, and sanitation systems, and
The term precision agriculture
means the use of on-farm precision agriculture technology in—
managing, tracking, or reducing crop production inputs, including seed, land, fertilizer, chemicals, water, and time,
optimizing weed, pest, and disease identification,
managing and tracking crop harvest and on-farm storage at a heightened level of spatial and temporal granularity to improve efficiencies, reduce waste, and maintain environmental quality, and
The term precision agriculture technology
means any technology (including equipment that is necessary for the deployment of such technology) that directly contributes to a reduction in, or improved efficiency of, inputs used in specialty crop production, harvesting, and on-farm storage including—
Global Positioning System-based or geospatial mapping,
satellite or aerial imagery,
yield monitors,
soil mapping,
non-chemical weed and pest control technologies, including autonomous laser weeders,
internet of things and telematics technologies,
network connectivity products and solutions,
Global Positioning System guidance or auto-steer systems,
variable rate technology for applying inputs, such as section control,
robotics,
any other technology, as determined by the Secretary, that leads to a reduction in, or improves efficiency of, inputs used in crop production and harvesting, which may include seed, fertilizer, chemicals, water, and time.
Section 6417 of such Code is amended—
in subsection (b), by adding at the end the following:
The innovative agricultural technology investment credit under section 48F.
in subsection (d)(1)—
in subparagraph (E), by striking (C), or (D)
each place such term appears and inserting (C), (D), or (E)
,
by redesignating subparagraph (E) (as amended by clause (i)) as subparagraph (F), and
by inserting after subparagraph (D) the following:
If a taxpayer other than an entity described in subparagraph (A) makes an election under this subparagraph with respect to any taxable year in which such taxpayer has, after December 31, 2023, placed in service qualified property which is part of an innovative agricultural technology project (as defined in section 48F(b)), such taxpayer shall be treated as an applicable entity for purposes of this section for such taxable year, but only with respect to the credit described in subsection (b)(13).
Section 46 of such Code is amended—
in paragraph (6), by striking and
at the end,
in paragraph (7), by striking the period at the end and inserting , and
, and
by adding at the end the following new paragraph:
the innovative agricultural technology investment credit.
Section 49(a)(1)(C) of such Code is amended—
in clause (vii), by striking and
at the end,
in clause (viii), by striking the period at the end and inserting , and
, and
by adding at the end the following new clause:
the basis of any qualified property which is part of an innovative agricultural technology project under section 48F.
Section 50(a)(2)(E) of such Code is amended by striking or 48E(e)
and inserting 48E(e), or 48F(c)(1)
.
The table of sections for subpart E of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 48E the following new item:
The amendments made by this section shall apply to property the construction of which began after January 1, 2025.