South Carolina H 5180: Income tax deduction

Bill Text

2025-2026 Bill 5180 Text of Previous Version (Feb. 12, 2026) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 5180

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

A bill

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ADDING SECTION 
12-6-1155 SO AS TO ALLOW A DEDUCTION FOR A FARMER WHO SELLS OR LEASES FARMLAND 
TO A BEGINNING FARMER OR ENTERS INTO A CROP-SHARE AGREEMENT WITH AN EXISTING 
FARMER, AND TO SET FORTH THE LIMITATIONS ON THE DEDUCTION.

Be it enacted by the 
General Assembly of the State of South Carolina:

SECTION 1. Article 9, Chapter 6, Title 12 of the S.C. Code is 
amended by adding:

 Section 
12-6-1155. (A)(1) A taxpayer who is 
a farm owner who sells all or a portion of such farmland to a beginning farmer is 
allowed a deduction from South Carolina taxable income equal to the amount of 
capital gains received from the sale in the tax year. The deduction is limited 
by the amounts set forth in item (2) and only to the extent the capital gains 
were included in federal adjusted gross income for the tax year.

 (2) 
A taxpayer is allowed a deduction equal to:

 (a) 
one hundred percent for the first two million dollars of capital gains;

 (b) 
eighty percent for the next one million dollars of capital gains;

 (c) 
sixty percent for the next one million dollars of capital gains;

 (d) 
forty percent for the next one million dollars of capital gains; and

 (e) 
twenty percent for the next one million dollars of capital gains.

 (B) A 
taxpayer who is a farm owner who enters a lease or rental agreement for all or 
a portion of such farmland with a beginning farmer is allowed a deduction from 
South Carolina taxable income equal to the amount of cash-rent income received 
from the lease or rental, but not to exceed twenty-five thousand dollars, and 
only to the extent the income was included in federal adjusted gross income for 
the tax year.

 (C) A 
taxpayer who is a farm owner who enters a crop-share arrangement on all or a 
portion of such farmland with a beginning farmer is allowed a deduction from 
South Carolina taxable income equal to the amount of income received from the arrangement, 
but not to exceed twenty-five thousand dollars, and only to the extent the 
income was included in federal adjusted gross income for the tax year.

 (D) 
The Department of Agriculture shall assist the Department in Revenue in 
determining eligibility and the amount of the deduction. Each agency may adopt 
rules and promulgate regulations necessary to implement the provisions of this 
section.

 (E) 
For purposes of this section:

 (1) 
"Beginning farmer" means a taxpayer who:

 (a) 
has filed at least one but not more than ten Internal Revenue Service Schedule 
F (Form 1040) Profit or Loss From Farming forms since turning eighteen years of 
age;

 (b) 
is approved for a beginning farmer loan through the United States Department of 
Agriculture Farm Service Agency Beginning Farmer direct or guaranteed loan 
program;

 (c) 
has a farming operation that is determined by the South Carolina Department of Agriculture 
to be new production agriculture but is the principal operator of a farm and 
has substantial farming knowledge; or

 (d) 
has been determined by the South Carolina Department of Agriculture to be a 
qualified family member.

 (2) 
"Farm owner" means an individual who owns farmland held in a conservation 
easement and disposes of, or relinquishes use of, all or some portion of such 
farmland by:

 (a) 
a sale to a beginning farmer;

 (b) 
a lease or rental agreement not exceeding ten years with a beginning farmer; or

 (c) 
a crop-share agreement not exceeding ten years with a beginning farmer.

 (3) 
"Qualified family member" means an individual who is related to a farm owner 
within the fourth degree by blood, marriage, or adoption and who is purchasing 
or leasing or is in a crop-share arrangement for land from all or a portion of 
such farm owner's farming operation.

SECTION 2. This act takes effect upon approval 
by the Governor and first applies to sales, leases, and agreements made for tax 
years beginning after 2025.

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This web page was last updated on February 12, 2026 at 11:48 AM