Tax credits for Illinois’ 'agritourism' businesses available

[November 12, 2022] 
By Zeta Cross | The Center Square contributor

(The Center Square) – Farmers take in liability risks with agritourism. A new tax incentive program in Illinois may help mitigate those risks.

From Christmas tree farms to zip lines to goat yoga, it’s all agritourism. Alas, there are inherent risks when members of the public set foot on working farms, said Raghela Scavuzza, executive director of the Illinois Specialty Growers Association. Farmers need liability protection specifically for agritourism customers.

“This kind of insurance protection is beyond what normal farm insurance covers, and it is costly,” Scavuzza told The Center Square. “It can be 20% to 30% of operational costs for an agritourism business to have this protection.”

Many agritourism businesses in Illinois are small operations of $25,000 and under a year. The cost of the additional insurance is a burden that can discourage farmers from adding an agritourism component.

This spring, lawmakers acted to provide some relief. They passed the Agritourism Liability Insurance Tax Credit program to give a state income tax credit of up to $1,000 in order to offset the cost of liability insurance premiums. Gov. J.B. Pritzker signed the measure into law, saying that tax relief for agritourism businesses will boost the state’s tourism industry.

Scavuzza said agritourism is an experience that people can enjoy when they visit a working farm.
 

“Agritourism is a wide range of ever-changing things. It’s about how creative a farm can get,” she said.

Pick-your-own produce or flowers, corn mazes, petting zoos, educational and historic exhibits – anything that draws customers to a farm adds to that farm’s revenue stream and supports the local rural community, she said.

“One of the big things we learned during COVID was how much disconnect there is from how our food gets from the farm to the plate,” Scavuzza said. “Agritourism helps people understand how and what farmers are doing in Illinois.”

Nationwide, agritourism is a $3 billion business. Illinois is anxious to encourage more of it, Scavuzza said.

The Illinois Farm Bureau and the Illinois Specialty Growers Association have been lobbying for several years to help agritourism businesses out with their liability problem.

“Illinois is one of the few states in our surrounding area that does not have limited liability protection,” Scavuzza said. “That means that once a farm operator begins taking tickets, someone could sue for some kind of incident on the farm.”

Last week, the Illinois Department of Agriculture began taking applications for agritourism certification on its website.

Businesses that are approved and certified by the IDOA will be able to use the certification to get a state tax credit up to $1,000 when they do their taxes. The program is in place for 2022 and 2023.