When you get a surprise in your accountant’s office, it’s almost never a good or happy surprise. Shelby Swain Myers, Associate Policy Advisor for Indiana Farm Bureau, told Hoosier Ag Today that those surprises for farmers led to action being taken during this year’s Indiana General Assembly.
“Late in the fall last year, farmers were beginning to meet with their accountants. We were hearing different stories about farmers having a significant increase in their state income taxes. These were unanticipated large increases that no one really planned for and no one could really figure out what was happening.”
Myers said that as they dug deeper, they realized that changes made as a result of the Tax Cuts and Jobs Act passed at the federal level in 2017 were the reason why.
“The process for a like-kind exchange, when farmers would trade-in equipment for a new piece, got altered at the federal level. While we were held harmless there, when it trickled down to the state level, we received some issues that now the process was being treated like a sale and a purchase and farmers were being charged income tax on that sale.”
She said that passing Senate Enrolled Act 565, which was signed into law by Governor Holcomb earlier this week, was a big win for Indiana farmers to reverse that tax consequence.
“What we hope is that now farmers can meet again with their accountant, get an amended tax return for the 2018 year, and be held harmless going forward whenever they do a like-kind exchange at the state level.”
Katrina Hall, Indiana Farm Bureau’s director of public policy, said in a statement, “Indiana Farm Bureau was successful in advocating for legislation in the 2019 session that improved agriculture and rural Indiana, and that would not have been possible without our members. They made sure their voices were heard by visiting the Statehouse nearly every day of session, communicating with legislators at third house meetings, and by connecting with their elected officials by phone and email. They were able to share how the decisions made in the state’s capital impact their farms, businesses and communities.”