Lawmakers pass tax credit to offset liability insurance costs for agritourism business

[May 16, 2022] By Zeta Cross | The Center Square contributor

(The Center Square) – A tax incentive in the state budget that begins July 1 could help cover liability insurance costs for Illinois’ agritourism industry.

Pumpkin patches, crop mazes, orchards and pick-your-own farms are examples of agritourism businesses in Illinois. They are prime connectors for city folk and Illinois farm communities, Steve Miller, owner of Liberty Apple Orchard in Edwardsville, said. He told The Center Square that it is important for children to be able to see food growing and taste it.

Miller is pleased that Illinois lawmakers approved as part of the state budget a measure that gives agritourism businesses a $1,000 state tax credit to offset liability insurance costs.

“This kind of legislation is important not only to the hundreds of specialty growers in the state, but also to the thousands of children and families who learn firsthand about how agriculture is important to our state,” Miller said.

Farms that provide U-Pick experiences, animal exhibits, crop mazes, hayrides and sleigh rides and historic and educational tours can all take advantage of the new state tax credit.

The tax credit is only set for the next two years.

Eighty-five percent of agritourism businesses in Illinois are small operations with revenues around $25,000 a year. Yet unlike similar businesses in 31 other states, in Illinois agritourism businesses are saddled with high liability insurance costs.

“For three years now, we have introduced the Agritourism Liability Act, through the good work of Sen. Rachelle Crowe. Unfortunately, that bill has not been successful,” Miller said.

Miller blames opposition from the Illinois Trial Lawyers Association for the lack of progress.

“They have an awful lot of clout in our state,” he said.

Miller wants Illinois to join Indiana, Wisconsin, Missouri and 28 other states – including litigious states like New York and Washington – that protect agritourism businesses with limited liability laws.
 

Visiting an orchard is just about as safe as visiting a neighborhood backyard, Miller said. At Liberty Apple Orchard, they keep the pathways mowed and pick up fruit that falls on the ground, but they can’t protect visitors from the same inherent risks that people find whenever they go outside. Bugs, uneven ground, weather and tree branches can be hazards anywhere.

“Guests at an agricultural facility have responsibility for their own safety,” Miller said.

Liability insurance is a major expense for agritourism operators. Liberty Apple Orchard’s liability coverage cost rose 9% this year, he said.