You’ve been granted free access to this subscribers only article.
Farm Bureau urges Congress to keep current tax tools
WASHINGTON, D.C. -- Farmers and ranchers need a tax code to manage the risks associated with agriculture while complying with tax liabilities, according to the American Farm Bureau Federation. In a statement filed May 15 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, according to a May 15 Farm Bureau press release.
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. Proposed changes to cash accounting rules, which would require some farmers to change to accrual accounting, would be time-consuming and costly to farms and ranches.
“Farmers and ranchers will either have to take time away from running their businesses or pay for help to comply,” said the American Farm Bureau Federation. “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 said it supports the continuation of unrestricted cash accounting currently available to most farmers and ranchers and cautioned against reducing the number of partnership types eligible to use the tool.
Further, because farming and ranching require large investments in machinery, equipment, and other depreciable capital, Farm Bureau said it supports maintaining the $500,000, Section 179 small-business expensing limitation and not reducing the $2 million acquisition limit, both of which are scheduled to drop next year respectively to a $25,000 limitation with a $200,000 threshold. Section 179 provides accelerated expensing and depreciation, allowing farmers to better manage cash flow, minimize tax liabilities, and reduce borrowing.
“Whether caused by unpredictable weather that affects crop yields or uncontrollable markets that set the price of goods sold, it is not uncommon for farmers and ranchers to have a year of high income followed by several lean years,” said the American Farm Bureau Federation. “If the Section 179 small business exemption and threshold are allowed to drop at the end of the year, farmers and ranchers will lose some of the accounting flexibility they need to manage their businesses.”
Your Opinions and Comments
Be the first to comment on this story!
You must be logged in to post a comment.
Agriculture Today Archives
County committee nomination period begins (June 22, 2016)
Hartmann takes the steer by the horns to win state championship (June 22, 2016)
La Vernia FFA wraps up school year with honors, scholarships (June 22, 2016)
Livestock Market Reports (June 22, 2016)
Root rot knocks out roses (June 22, 2016)
TDA Market Recap (June 22, 2016)
Texas Hay Report (June 22, 2016)
A student’s ag-related journey (June 15, 2016)
Family Land Heritage news (June 15, 2016)
Five dirty truths on agriculture (June 15, 2016)
Horseherb galloping through yards (June 15, 2016)
Kristin Storey: South Texas queen to compete for national title (June 15, 2016)
Livestock Market Reports (June 15, 2016)
Miller announces assistance for farmers devastated by floods (June 15, 2016)
No “rain, rain, go away” as precipitation persists (June 15, 2016)
Schwartz takes lead as Texas state veterinarian (June 15, 2016)
TDA Market Recap (June 15, 2016)
Texas Hay Report (June 15, 2016)
Texas Rural Leadership Program (June 15, 2016)
It’s almost rodeo time in Stockdale (June 8, 2016)
Livestock Market Reports (June 8, 2016)
Save seed pods for next fall (June 8, 2016)
TDA Market Recap (June 8, 2016)
Texas Hay Report (June 8, 2016)
Big Time Texas Hunts entries now on sale (June 1, 2016)
Burbridge leads the way in Buck Taylor roping event (June 1, 2016)
Farm Bureau solicits AgLead, FarmLead participants (June 1, 2016)
June 2016 Gardening Calendar (June 1, 2016)
Livestock Market Reports (June 1, 2016)
Save squash from vine borers (June 1, 2016)
State Farm Bureau testifies on agricultural use valuation (June 1, 2016)
TDA Market Recap (June 1, 2016)
Texas Hay Report (June 1, 2016)