The American Farm Bureau Federation hailed the strong bi-partisan effort by members of Congress as they urged Senate and House leadership to preserve the cash accounting system farmers and ranchers rely on. In letters to both House and Senate leadership, members from all 50 states called the cash accounting system fundamental to the success of small businesses across rural America. The letters were signed by 46 senators and 233 representatives. Farm Bureau President Bob Stallman on Friday said “we are pleased to see members of Congress reach across party lines and stand together for farmers and ranchers who are working to build their businesses and communities.” Cash accounting gives farmers and ranchers an important tool to expand their businesses and boost local economies, according to AFBF. A recent proposal by the Senate Finance Committee would require all businesses with annual receipts totaling $10 million to switch to the accrual method.
Under an accrual accounting system, small businesses would be taxed on non-existent income, thereby reducing their cash flow for operating costs and limiting opportunities for expansion. The added financial burden would require many to take out loans to cover the liquidity problems they would face.
Source: NAFB News Service