The National Council of Farmer Cooperatives praised lawmakers for their work in providing a fix for the repeal of the section 199 Deduction. NCFC applauded Senator John Hoeven of North Dakota and Senator John Thune of South Dakota for their work in adding the language to the tax bill, along with Senate Agriculture Committee Chairman Pat Roberts. Previously, NCFC said the tax legislation would result in a tax increase on farmers if the deduction was removed in the bill, as planned.
National Milk Producers Federation President Jim Mulhern says the final bill still repeals the deduction, but “allows cooperative members to claim a new 20 percent deduction on payments from a farmer cooperative.” Cooperatives would also be able to claim the 20 percent deduction on gross income less payments to patrons, limited to the greater of 50 percent of wages or 25 percent of wages plus 2.5 percent of the cooperative’s investment in property. Mulhern says the favorable treatment for gross income “will help minimize any potential increase in the tax burden on farmer-owned cooperatives.”
Source: NAFB News Service