Last week brought good news for renewing tax breaks that are significant for agriculture. The Senate Finance Committee has now included those in a package of tax extenders. Senate Finance Chair Ron Wyden agreed to revive several key ag-related tax breaks that expired last year, and American Farm Bureau Tax Adviser Pat Wolff says one of those is big for agriculture.
“The big news for farmers and ranchers is that section 179 small business extending is continued for two years at the level it was last year, which is $500,000 maximum deduction.”
Small business expensing allows tax write-offs in the same year as purchases. The 500,000-dollar deduction fell to 25,000 at the end of last year, much less than a single piece of farm equipment. Another big break was for biofuels.
“And this means it would be continued for two years or all the biodiesel and cellulosic biodiesel tax credits.”
The dollar per gallon biodiesel credit expired at the end of 2012. Wyden also agreed after some committee jostling to add back to his proposal the wind electricity tax credit. Both were important to Iowa Senator Chuck Grassley.
“Due to both economic and security reasons I am pleased that the chairman included the biodiesel credit in his original mark and has accepted my amendment to extend the wind production tax credit to a modified mark.”
The bill also renews a deduction for donating conservation easements. Chairman Wyden included non-binding sense of the committee language that this would be the last tax extender bill before comprehensive reform, an apparent olive branch to retiring House Tax Chair Dave Camp, and a nod to Wyden’s predecessor Max Baucus. Both pushed hard for sweeping tax reform and Camp has now opened the door to permanently extending some tax breaks.