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Major U.S. Agriculture Groups Call for Immediate Passage of the Tax Relief for American Families and Workers Act

April 12, 2024

WASHINGTON, D.C. – The United States Senate must move to immediately pass the Tax Relief for American Families and Workers Actwrite 35 associations representing U.S. farmers and ranchers in a recent letter to Senate leadership.

The associations represent both agriculture producers and workers up and down the U.S. food supply chain. As the letter notes, agriculture, food, and related industries are already struggling as a result of inflation and current economic conditions. The associations write that immediate passage of the Tax Relief for American Families and Workers Act will provide much-needed relief to the agriculture sector.

Agriculture is a capital-intensive business, making the ability to fully deduct equipment purchases vital to American farmers and ranchers:

“Bonus depreciation incentivizes businesses to make capital expenditures and frees up cash to allow the business to re-invest in their business to grow and create jobs, which in turn creates economic growth. This provision became even more important to farmers, ranchers, growers, and landowners after the TCJA for two reasons: first, with its expanded application to used property; second, due to the removal of personal property as property eligible for a tax-free Section 1031 like-kind exchange. Agriculture is a capital-intensive business. Without the ability to fully deduct equipment purchases, farmers, ranchers, growers, and landowners are facing tax increases on their 2023, and 2024 tax returns.”

Section 179 expensing provisions would make it easier for producers struggling with inflation:

“Raising the maximum deduction level for Sec. 179 expensing would also be helpful in those instances where it makes more sense for producers to utilize this provision, especially given the inflationary pressures the agriculture sector has been dealing with on the equipment side.”

The research and development provision allows agriculture industry to better compete on the world stage:

“We also urge you to pass this legislation to remove the TCJA requirement that research and development costs must be capitalized and amortized over five years rather than being deducted in the year in which they are incurred. This is hurting many feedyards, biofuels companies, and food processing companies that rely on research and development to improve efficiency and compete with foreign businesses. This provision has artificially increased the taxable income of these companies, leaving many with massively increased tax bills, without the income necessary to make those tax payments.”

READ: ICYMI: Bipartisan Tax Bill Cements President Trump’s Legacy

READ: Pro-Life Conservative Leaders Call on Senate to Pass Tax Relief for American Families and Workers Act