The Senate Finance Committee responded to the concerns of farmers and ranchers across America as it put forward a bill today to extend important tax provisions through 2016.
The legislation includes two provisions that let small businesses deduct major capital expenditures over just a few years, rather than the full life of the equipment they buy. Known as Section 179 small-business expensing and bonus depreciation, these measures have already boosted the economy and increased cash flow for farmers and ranchers. Extending the provisions now is critical and an important step toward making them a permanent part of tax law. In a business marked by uncertainty, farmers and ranchers need a tax code that allows them to plan ahead and invest in the future of their businesses. The bill also includes language to promote the production and use of renewable energy, as well as incentives for charitable donations and higher education.
“Section 179 and bonus depreciation lend stability and help minimize risk in an unpredictable industry,” AFBF President Bob Stallman said. “Farmers and ranchers rely on tax provisions that allow them to manage their cash flow and put their money back to work for their businesses and local economies.”
Since farming requires large investments in machinery, equipment and other depreciable capital, farmers and ranchers depend on tax provisions that allow them to write off these business expenses in the year purchases are made. This kind of flexibility in the tax code boosts small farm and ranch businesses especially, helping to increase cash flow and reduce borrowing.
“These tax provisions are an important tool for farmers and ranchers to keep their businesses moving forward,” Stallman said. “It’s time for Congress to make these provisions permanent. Farmers need more than a temporary patch on the tax code: They need the certainty that they can count on these provisions every year as they plan for the future of their businesses.”