House Votes to Permanently Extend Favorable Tax Treatment of Farmers' Capital Purchases

February 13, 2015 11:43 AM
 
House Votes to Permanently Extend Favorable Tax Treatment of Farmers' Capital Purchases

But a permanent extension of Section 179 faces an uncertain future in the Senate, and a possible veto at the White House.

Source: National Milk Producers Federation

The National Milk Producers Federation thanked the House of Representatives for passing legislation today, by a vote of 272-142, to permanently extend the ability of family farmers and small businesses to write off capital purchases immediately, instead of over time. The bill now faces an uncertain future in the Senate, and a possible veto at the White House.

A permanent extension of Section 179 is one of NMPF’s legislative priorities for 2015. The tax provision is widely used by farmers to buy tractors, farm implements, and other equipment. Last December, President Obama signed legislation extending the Section 179 tax credit, along with more than 50 other expired tax provisions, but for 2014 only. That action meant farmers could benefit from the expensing allowance only on the tax forms they are filling out for 2014.

“Dairy farming requires significant investments in machinery and equipment,” said NMPF President and CEO Jim Mulhern. “By allowing producers to immediately write off these purchases, Section 179 gives producers an incentive to invest in their businesses while it reduced their record-keeping burden. This permanent extension provides much greater financial certainty in a year when dairy farmers will see much lower income levels.”

The maximum amount of annual expensing under the newly-passed House bill, H.R. 636, is $500,000, as it is for 2014. A 50 percent bonus depreciation for the purchase of new capital assets, including farm equipment, is included.

“Failure to permanently restore Section 179 will add to the financial strains on family farmers who already find it difficult to pass on their farms to the next generation,” Mulhern said.

NMPF, the voice of 32,000 dairy farmers in Washington, joined 33 other agricultural organizations in a letter sent Monday urging the House to approve H.R. 636.

 

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Comments

 
Spell Check

Brigette Ullrich
Truxton, NY
2/14/2015 10:56 AM
 

  To the man from IL: Most commodities are well below 50% of parity (the price a farmer needs to receive to have an income near average) including milk. As Donna stated dairy farmers have had a good year after MANY disastrous price years. Good for them, and as Donna stated there were no "handouts" this year. Don't know where the $70/acre was from but I guess I missed it! If you think farming is such a bargain why not try it? Less than 2% of the population feeds the other 98%. Sometimes I wonder why we bother-especially when it is 14 below zero!

 
 
Zorcon
Western, NE
2/14/2015 08:22 PM
 

  Illinois dude: You must me a contributor to the Environmental Working Group--the group whose only purpose is to end all payments to agriculture. The following prices are what ag producers should receive for their products in today's cost environment: Wheat $18.50/bu.; Corn $13.30/bu.; Soybeans $31.80/bu.; Milk delivered $54.30/cwt.; Wheat trades for less than $5.00/bu., corn trades for less than $4.00/bu. Soybeans for less than $10.00/bu. I'm not certain what the raw milk price is per cwt. currently. We've been handed a "cheap food policy" by our government. They support ag as long as it's the flavor of the month. That's where our different ag associations are important to us to keep our voices heard in Washington. Livestock and grain producers must never speak ill of each other with regard to Washington. Remember, Europe has been hungry, they support their farmer. The US hasn't been hungry and as an ag producer I help to ensure that! If I get a couple of extra bucks at tax time--so be it. Wage earning is easy, production ag is not!

 
 
cs
Buckingham, IL
2/15/2015 02:18 PM
 

  This is more bull. I came from a farm. I see what going on. Around here all membesr of the family are managers including farmers wife. The kids just help out, they all work at other jobs. Sad, they are all getting a HANDOUT now and laughing at Obama all the way to the bank. There goes our tax money. Farmers don't the world. They sell to the highest bidder, they could care less where the grain goes.

 
 

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