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 here
and 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 House
and 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.
