New York State Assemblyman Fred W. Thiele, Jr. (I, D, WF, WE- Sag Harbor) has introduced legislation in the State Assembly that would exempt protected farmland in bona fide agricultural production from the State Estate Tax. Currently such lands are subject to estate tax upon the death of the landowner. Frequently, lands must be sold or developed to pay the tax. Such a tax policy adversely impacts the economic viability of agriculture.

Under Thiele’s proposal, if a farmer records an easement, covenant, or other restriction under Section 247 of the General Municipal Law, restricting the use of the land to only agricultural purposes, the value of the land would be exempt from any estate tax levy upon the death of the farmer. The land would continue to be exempt from estate taxes as long as the land remains so restricted. If at any time in the future, the farmland is no longer subject to the easement, covenant, or restriction, the estate tax would then become due. The amount of the additional tax would be equal to what the tax would have been if not for the legal restriction on development.

Thiele stated, “The high value of real estate in places like Long Island, the Hudson Valley, and other agricultural areas near urban fringes and metropolitan areas threaten the future economic viability of agriculture. Estate tax policy based upon ‘highest and best use’ rather than ‘current use’ results in the conversion of valuable farmland to development. This legislation instead would make state tax policy an incentive promoting secure regional sources of food as well as protecting our rural quality of life and economic traditions.”