Commentary: Farmers and ranchers advocate for federal tax relief

Issue Date: December 16, 2015
By Erin Anthony
Erin Anthony
The federal tax code should give farmers and ranchers certainty for long-term business decisions, according to Farm Bureau and other agricultural organizations that have asked Congress to restore and extend tax provisions that encourage reinvestment in businesses and local communities.

With the holiday season in full swing and the year quickly coming to an end, farmers and ranchers are urging Congress to reinstate and extend expired tax provisions that help improve the economic viability and stability of our food, fiber and fuel production. Farmers need provisions like Section 179 small business expensing and bonus depreciation to help them make business purchases while dealing with uncontrollable weather and unpredictable markets.

This fall, Farm Bureau and more than 2,000 other companies and organizations sent a letter to lawmakers explaining why these provisions, most of which expired at the end of 2014, are so important. We're calling for Congress to finally bring farmers, ranchers and other small business owners across the country the relief and predictability they need for economic growth. Failure to pass a bill extending these provisions amounts to a tax increase.

Farmers and ranchers need a tax code that gives them certainty for long-term business decisions that can grow and expand their operations. Earlier this year, Congress took steps toward bringing these tax provisions back for 2015 and possibly longer. Back in July, the Senate Finance Committee extended through 2016 a package of tax provisions, including a number of those important to farmers and ranchers. The Farm Bureau-supported provisions in the tax extender package include:

  • Section 179 small business expensing: The maximum amount that a small business can immediately expense when purchasing business assets instead of depreciating them over time is $25,000. Last year, the maximum amount was $500,000, reduced dollar for dollar when expenditures exceed $2 million.
  • Bonus depreciation: An additional 50 percent bonus depreciation for the purchase of new capital assets, including agricultural equipment.
  • Incentives for renewable fuels and energy, including biodiesel, wind power and refueling property.
  • An enhanced deduction for donated food.
  • A provision encouraging donations of conservation easements.

On the House side in February, lawmakers passed the permanent extension of Section 179 small business expensing (H.R. 636), the tax deduction for donating food (H.R. 644) and the tax deduction for donating conservation easements (H.R. 644).

In addition, the House Ways and Means Committee in September approved a bill (H.R. 2510) to permanently extend 50 percent bonus depreciation. The measure would also expand the provision to include fruit- and nut-bearing plants with preproductive periods of two or more years.

It's time for Congress to finish what it started. Delaying these tax extenders will only delay economic growth and prevent farmers and ranchers from reinvesting in their businesses and local communities.

Join Farm Bureau in calling on Congress to bring small businesses across the country the tax relief they need.

(Erin Anthony is editor of the American Farm Bureau Federation FBNews e-newsletter and website.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.