State Tax Deduction

The Maryland Income Tax Subtraction Modification for Conservation Equipment helps farmers offset costs associated with buying certain types of conservation equipment to control soil erosion, manage nutrients and protect water quality in streams, rivers and the Chesapeake Bay. The subtraction modification allows farmers to subtract eligible equipment purchases from taxable income on Maryland individual and corporate tax returns.

A farmer is allowed a subtraction on his/her Maryland Tax Return equal to 100 percent of the cost of buying and installing conservation tillage equipment, liquid manure injection equipment, poultry or livestock manure spreading equipment, global positioning devices, and integrated optical sensing and nutrient application systems.Vertical tillage equipment used to incorporate livestock manure or poultry litter is eligible for a subtraction credit of 50 percent of its cost. The following rules apply:

  • The equipment must have a useful life of four years
  • The taxpayer must own the equipment at least three years after the taxable year in which the subtraction is made
  • If the subtraction exceeds the Maryland taxable income, any excess may be used in succeeding tax years, not to exceed five
  • A taxpayer must submit a form and signed and dated receipt of the equipment purchase to the local soil conservation district and MDA.