Posted November 20, 2014
The National Milk Producers Federation along with 41 other agricultural organizations in are urging Congress to restore Section 179 code provision that allows small businesses and farms to write off capital purchases such as farming equipment immediately as opposed to over time, according to a Wisconsin Ag Connection article available here. Farm Futures also published an article available hereand Agri-Pulse here.
The provision is one of more than 50 expired tax policies expected to be under consideration for reinstatement by the House and Senate during their post-election lame duck session. Farm groups have pushed restoration of Section 179 in a letter on November 18 to congressional leadership.
“Farming requires significant investments in machinery and equipment,” said NMPF President and CEO Jim Mulhern. “By allowing farmers to immediately write off these purchases on their taxes, Section 179 gives producers an incentive to invest in their businesses while it reduced their record-keeping burden.”
Previously farmers were able to take full depreciation deductible of an eligible item in the current tax year with a maximum deduction of $500,000 and a phase-out threshold of $2 million, according to Farm Futures.
Now the deduction level has fallen to $25,000 with a $200,000 phase-out for 2014 unless Congress acts on tax reform or a “tax extenders” package before the year’s end.
In a conference call with reporters, Dorothy Coleman, vice president of tax and domestic policy with the National Association of Manufacturers, said the focus of the letters “is not on telling Congress how to do it, but asking them and strongly urging them to get it done,” according to Agri-Pulse.
If the provision is not addressed during the lame duck session, tax extenders could still be approved in 2015 and retroactively applied to 2014 purchases.
A copy of the letter signed by 42 agriculture organizations and addressed to the Senate and House leadership outlining the importance of Section 179 in a potential tax extenders package is available here.
Two identical letters addressed separately were sent to all members of the Houseand Senate, and more than 500 organizations, companies, and local chambers of commerce signed the letters emphasizing the importance of action during the lame duck session.
For more information on estate planning and taxation, please visit the National Agricultural Law Center’s website here.