Farmers' year-long push results in congressional action on tax incentives
Thursday, December 31, 2015 - 4:00pm
Congress’ recent passage of legislation making permanent or extending several tax provisions important to agriculture is a great example of how the groundwork farmers and ranchers have laid all year can pay off. Over the past 12-plus months they have been explaining to their lawmakers how tax provisions like section 179 small business expensing and bonus depreciation make the difficult business of running a farm more manageable.
In the past, Congress had approved one- or two-year extensions—sometimes retroactively—of these critical provisions. Though that was helpful, not knowing from one year to next whether key small business tax provisions would be available made it extremely challenging for farmers and ranchers to make the best decisions about equipment purchases and other farm and ranch improvements and investments.
This year though, lawmakers made permanent a number of Farm Bureau-supported tax incentives, including Section 179 small business expensing, with a maximum amount of $500,000 and indexed for inflation. Also made permanent are provisions related to the donations of conservation easements, food donations (expanded for people using cash accounting), deductions for state and local sales taxes and charitable contributions to ag research organizations.
Congress also provided for an additional 50 percent bonus depreciation for the purchase of new capital assets, including agricultural equipment, through 2017, 40 percent for 2018 and 30 percent for 2019. For the first time, trees, vines and plants bearing fruits or nuts are included.
Provisions for home-grown, renewable fuels, which expired at the end of 2014, are extended through 2016.
Alongside the package of tax provisions, lawmakers on Capitol Hill headed off more than $1 billion in retaliatory tariffs from Canada and Mexico by repealing mandatory country-of-origin labeling for beef, chicken and pork sold in the U.S. Farm Bureau was one of the leading voices in calling for action on COOL when the World Trade Organization announced its decision to allow Canada and Mexico to impose the tariffs.
Looking to 2016, farmers and ranchers will continue to build on the foundation they’ve laid this year on issues related to voluntary GMO labeling, Endangered Species Act reform, agriculture’s labor needs and more.