Legislative action on tax extenders, IRS section 179 and bonus depreciation is on the priority list for cattlemen as the 113th Congress finishes out the year post-election, says Kevin Kester, California cattleman and NCBA Policy Division vice chair.
The section 179 provision in previous tax years has allowed farm businesses to take the full depreciation deduction of an item that meets certain specifications – in many cases machinery – in the current tax year, with a maximum deduction of $500,000 and a phase-out threshold of $2 million.
This year, however, that deduction level fell to $25,000 with a $200,000 phase out. Kester says it will remain that way unless Congress acts.
"We want to do our very best to get Congress to take some action to get some retroactive amount back up closer to the $500,000 allowance," Kester said. "We're already behind the 8-ball for investment planning and planning major purchases on the ranch or farm."
Kester says the provision could improve growth in rural economies due to larger farmer and rancher purchases.
In addition to authorizing continuation of higher deduction levels in section 179, Kester says action on the Trade Promotion Authority is also on the NCBA wish list.
The Trade Promotion Authority is a measure that would allow President Barack Obama to "fast-track" key trade deals by limiting Congress' ability to tack on amendments. TPA hasn't been approved since 2007, but could offer some lift to the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, supporters say.
Kester says the TPA could allow TPP to move forward with an up or down vote for a "clean" passage. "The waters get muddled pretty fast," he said of Congressional trade deal approvals.
Other farm and ag groups also support the TPA, though there remains opposition among Congress members that may snag its passage.
News source: NCBA