In a statement filed with the House Ways and Means Committee for a hearing on small business taxation – the American Farm Bureau Federation urged congressional members to maintain cash accounting tools and higher small business expensing limits in any tax code rewrite. Farm Bureau says cash accounting tools – like the deferral of commodity and product receipts and prepaying the cost of livestock feed, fertilizer and other farm supplies – are important to farmers. The group says proposed changes to cash accounting rules – which would require some farmers to change to accrual accounting – would be time-consuming and costly to farmers and ranchers. According to Farm Bureau President Bob Stallman – farmers and ranchers would either have to take time away from running their businesses or pay for help to comply. He says both are harmful in an industry with tight profit margins, unpredictable income streams and an inability to pass on added expenses to customers.
Farm Bureau supports the continuation of unrestricted cash accounting and cautions against reducing the number of partnership types eligible to use the tool. Farm Bureau also supports maintaining the 500-thousand Section 179 small business expensing limitation and not reducing the two-million dollar acquisition limit. If the Section 179 small business exemption and threshold are allowed to drop next year to a 25-thousand dollar limitation with a 200-thousand dollar threshold – Farm Bureau says farmers and ranchers will lose some of the accounting flexibility they need to manage their business.
Source: NAFB news service