A Christmas gift of sorts for American agriculture as last week. Congress passed two bills that will solve several pressing agricultural issues and put more money in the pocketbooks of farmers. A tax bill provides some long wanted certainty on tax deductions for farmers and small businesses. The bill will permanently cap small business deductions for capital expenses at $500,000.00, up from the previous limit of $25,000.00. The PATH Bill also extends the existing bonus depreciation for the purchase of new capital assets for another five years at 50 percent for 2015-2017, 40 percent in 2018, and 30 percent in 2019.
House Ways and Means Chair Kevin Brady, a Texas Republican, says the tax bill is a win for agriculture, “This bill provides tax relief that families and businesses can count on.” Bob Stallman, President of AFBF said, “The legislation provides needed changes to tax policy, funding for programs important to farmers, ranchers, and rural communities.” “These tax provisions allow farmers to reinvest in their operations, and that has a ripple effect across the entire agriculture industry,” stated NCGA President Chip Bowling.
A government spending bill contained repeal of the COOL program and just in time. National Cattleman’s Beef Association Vice President Collin Woodall stated, “Here at the 11th hour, they have finally repealed COOL. This will eliminate trade retaliation and allow us to maintain our trading relationship with Canada and Mexico.” Woodall said the reality that retaliation was set to begin next week finally got Congress to act.
While pleased with the congressional action, Indiana Farm Bureau President Don Villwock also expressed some disappointment, “We are disappointed, however, that the bill did not address GMO labeling and Waters of the U.S. (WOTUS), as both of those are key priorities in the ag community that require immediate resolution. Indiana Farm Bureau will continue pressing Congress to address GMO labeling and WOTUS until both critical issues are resolved.” He praised the Indiana delegation for their support of the tax provision reforms which includes permanent changes to Section 179 Small Business Expensing, “This allows taxpayers to deduct all of the cost of new or used business property, including equipment like tractors, rather than depreciating the cost over a longer period of time. PATH also includes an extension of Bonus Depreciation for several years, which will help farmers continually replace and upgrade farm equipment, buildings, and storage facilities to remain profitable and competitive.”
The spending bill also requires the USDA to use sound science when making food guideline recommendations. “It maintains Congressional oversight to ensure the 2015 Dietary Guidelines for Americans remain within the scope of nutrition and health and are based on the latest nutritional evidence,” Kristina Butts, senior executive director of government affairs with NCBA, said. “Americans should enjoy a well-balanced diet with foods they enjoy. Beef is an excellent source of several key nutrients like zinc, iron and protein, and numerous studies have shown positive benefits of lean beef in the diet. We’re pleased Congress continues to be engaged in the process. It is important the role of the Dietary Guidelines continues as Congress intended – to provide nutrition advice based on sound science.”