Congress' tax, spending approvals make some breaks permanent

Congress' tax, spending approvals make some breaks permanent

Permanent Higher section 179 expensing included in Congress' spending and tax bills

Congress on Friday passed a $1.15 trillion Omnibus Appropriations Bill, legislation that includes provisions important to farmers, including higher section 179 expensing and bonus depreciation, as well as action on County-of-Origin Labeling.

Tax extenders
On small business taxation, the bill will permanently cap small business deductions for capital expenses at $500,000, up from the previous limit of $25,000.

The PATH Bill also extends the existing bonus depreciation for the purchase of new capital assets for another 5 years at 50% for 2015-2017, 40% in 2018 and 30% in 2019.

Permanent Higher section 179 expensing included in Congress' spending and tax bills (Thinkstock/flySnow)

The National Corn Growers Association has advocated for these two tax provisions for years and applauds Congress for these important changes to the tax code and support for America's farmers.

"These tax provisions allow farmers to reinvest in their operations – and that has a ripple effect across the entire agriculture industry and rural communities," said NCGA President Chip Bowling.

National Cattlemen's Beef Association President Philip Ellis reiterated support.

"These provisions are vital to providing a stable environment for farmers and ranchers like myself to plan for the future," he said. "We have had to rely heavily on last-minute tax extender legislation over the past several years, but making these provisions permanent will allow businesses to invest in equipment and property with the financial certainty required."

COOL
Though supported by some groups, COOL was repealed under the new legislation. NCBA, which did not support COOL, called repeal "a significant victory for America's cattle producers," based on concerns regarding retaliation from Mexico and Canada following the WTO's ruling the COOL was a technical barrier to trade.

"COOL has plagued our industry for many years now, costing us millions and driving us to the brink of retaliation from two of our largest trading partners," said NCBA President Philip Ellis. "Cattle producers have had to bear the cost of this failed program for far too long."

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Dietary guidelines
The omnibus also maintains Congressional oversight to ensure the 2015 Dietary Guidelines for Americans remain within the scope of nutrition and health and are based on the latest nutritional evidence.

Kristina Butts, NCBA senior executive director of government affairs, said the guidelines serve as the foundation for federal nutrition policy and that it is critical the recommendations are based on the latest science.

"Americans should enjoy a well-balanced diet with foods they enjoy," said Butts. "Beef is an excellent source of several key nutrients like zinc, iron and protein, and numerous studies have shown positive benefits of lean beef in the diet. We're pleased Congress continues to be engaged in the process. It is important the role of the Dietary Guidelines continues as Congress intended – to provide nutrition advice based on sound science."

Beef imports
Additionally, Ellis said the bill requires a more stringent regulatory process for allowing beef imports from regions with a history of animal disease outbreaks.

"America's cattle producers are strong supporters of trade," said Ellis, "but we must have strong safeguards in place and do our due-diligence to ensure the health and well-being of our domestic herd is not sacrificed."

Environmental provisions
Continued assurance on several environmental regulations is also maintained in the bill, NCBA said. Specifically, the bill continues to prohibit the EPA from requiring livestock producers to obtain Clean Air Act permits or report greenhouse gas emissions on livestock operations.

Brenda Richards, Public Lands Council president, said an increase in wildfire management funds in the bill is critical as the recent drought and lack of federal forest management has ignited several massive fires this year.

"Wildfires are a significant threat to our forests and rangelands as well as our homes and lives," said Richards. "When a fire does break out, however, we need the appropriate resources to put it out. Additionally, we appreciate the continued blocking of the Sage Grouse listing, which will give producers more flexibility to address prescriptive Resource Management Plans. Livestock grazing is one of the best management tools we have to maintain healthy landscapes, reducing the risk of wildfire and allowing our natural resources to thrive."

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Omitted provisions
There were a handful of items left out of the bills, ag groups said, such as elimination of the "Waters of the United States" rule.

The National Milk Producers Federation also was disappointed that the bill did not provide a federal preemption of mandatory state GMO labeling laws, reforms to child nutrition programs to ensure increased access to dairy options in schools and a proposal creating a manure nutrient recovery tax credit.

However, NMPF CEO Jim Mulhern said the bill is a welcome benefit to the ag industry, especially because of higher section 179 expensing.

"The package features key items that will help make Christmas a little merrier for the nation's dairy farmers," Mulhern said.  "In particular, the tax measures will help farmers' budgets in a year when they've been squeezed financially by low milk prices. Making the Section 179 credit permanent is a very welcome outcome after several years of short-term extensions of the provision."

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