National Farmers Union is calling on the House Ways & Means Committee to get busy on a tax-extenders package comparable to one passed by the Senate Finance Committee before the congressional break.
You might recall Congress began in January with big plans to reform the Tax Code, which was one reason last December that lawmakers only passed business tax breaks for 2014. Congress was going to get busy on comprehensive tax reform until it dawned on them in early summer that they weren't getting anything accomplished. And, of course, lawmakers didn't want to make waves a year before a presidential election.
In a letter drafted last week, NFU President Roger Johnson called on Ways and Means Committee Chairman Paul Ryan, R-Wis., and Ranking Member Sander Levin, D-Mich., to get busy on a tax-extenders bill.
“Agricultural producers are facing a myriad of challenges as commodity prices plummet and demand has slumped over the last year,” Johnson wrote to the House committee leaders. “In this particularly difficult period, our members require a predictable tax structure. NFU encourages the advancement of a multiyear tax extenders package well in advance of the end of 2015.”
Johnson pointed that Congress has approached tax credits in a somewhat haphazard way in recent years "that has been unfriendly for family farmers and rural residents."
Jonnson added, “We recognize the difficulties you face as you work to ensure that these valuable business tools remain in place. Cost, politics, and a challenging economic environment only compound the challenge. NFU urges your committee to retain these credits in any final package, while at the same time allowing for the periodic review of these credits. We thank you for your attention in this matter and for the support you provide to family farmers and ranchers and residents of rural America.”
As of now, the House Ways & Means Committee has a markup on debt limit legislation on Thursday, but nothing is scheduled regarding tax extenders. The committee has apparently invested a great deal of time updating its website as well. Given the results of committee's web update, it might just be better if the House bypasses Ways & Means and just takes the Senate tax package straight to the floor. http://waysandmeans.house.gov/…
Seriously, though, in Europe farmers protested in Brussels on Monday and immediately got the EU to approve a $500 million Euro bailout plan. U.S. farmers are asking Congress to quickly adopt tax breaks that benefit a broad array of businesses. We'll see if that can get done before everyone is contemplating whether it's time to take down their Christmas lights.
The Senate Finance package is a big deal for agriculture at the moment as low prices have left farmers reining in machinery purchase, thus leaving equipment manufacturers and dealers struggling in the process. The key there is renewing the $500,000 Section 179 deduction. The $500,000 deduction expired at the end of 2014 and fell all the way down to $25,000. Moreover, as late as Congress completed last year's extenders package, few people could really plan ahead to take advantage of the $500,000 level. Because this tax package looks to grant a two-year extension, farmers would have more time to plan and dealers would have a chance to pitch the advantages of the deduction.
The $500,000 deduction would be available to any business with taxable income at $2 million or lower. Businesses with taxable income above $2 million would see the $500,000 deduction decline on a dollar-for-dollar amount.
The Senate Finance bill also would extend bonus depreciation for business property put into service after Dec. 31, 2014 and would carry on through 2016 for most business equipment. This would reinstate 50% first-year depreciation for approved business equipment and machinery.
In energy, the Senate plan also would extend the $1.01 per gallon second generation biofuel "cellulosic" tax credit through 2016. The tax credit expired at the end of 2014 as well.
The $1 per gallon biodiesel tax credit would also be extended through 2016, as would a tax credit for blending 100% biodiesel.
Companies that install blender pumps, or "qualified clean-fuel vehicle refueling property," would get to claim a 30% credit, up to $30,000 per location, for putting in such blender pumps. Ethanol, biodiesel, natural gas, compressed natural gas and hydrogen pumps would be eligible for the credit for pumps put into service in 2015 and 2016.
Second-generation biofuel producers would also qualify for special 50% bonus depreciation for any facilities put into service in 2015 or 2016.
Wind, closed-loop biomass and methane production tax credits that expired at the end of last year would also be extended through 2016.
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