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
A farmer’s view of the Clean Water Act (October 7, 2015)
Bad year for fig trees (October 7, 2015)
County Farm Bureau convention Oct. 15 (October 7, 2015)
County validation (October 7, 2015)
Dove season looking good (October 7, 2015)
Hay & Forage Report (October 7, 2015)
Livestock Market Reports (October 7, 2015)
Ranching event Oct. 8 (October 7, 2015)
Sheriff’s Office to host pistol match (October 7, 2015)
Watch for whooping cranes as they start fall migration (October 7, 2015)
Youth ride off with saddles (October 7, 2015)
Youth-only hunting weekends (October 7, 2015)
October 2015 Gardening Calendar (October 1, 2015)