A bill to make tax provisions permanent for farmers and ranchers advanced to the Senate last week.
The Protecting Family and Small Business Tax Cuts Act of 2018 makes changes in the tax code passed by Congress last year permanent for farmers and ranchers.
The House of Representatives voted in favor of the bill last week, and the bill includes provisions that affect the majority of farms and ranches, according to American Farm Bureau Federation (AFBF) Senior Congressional Relations Director Pat Wolff.
“Important to farmers and ranchers are keeping the lower tax rates, keeping the increase in the estate tax exemption and making sure that the 20 percent business income deduction stays put,” Wolff told AFBF’s Newsline.
The Tax Cuts and Jobs Act, passed in 2017, reduced taxes for all businesses, but only the tax cuts for incorporated businesses operated as C corporations are permanent.
Most farmers and ranchers, however, file their taxes as sole-proprietors, partnerships or S corporations.
“We knew when tax reform passed last year that a second installment was going to be needed to make the provisions permanent,” Wolff said. “That’s what the House did last week. Now the bill goes over to the Senate where hopefully they’ll take action after the election.”
Agriculture needs the predictably in the tax code the bill provides, Wolff noted.
“Farming and ranching is difficult enough,” he said. “There are so many unpredictable things, weather and markets, and the last thing that farmers and ranchers need is an unpredictable tax code, a tax code that changes after 2025. So, it’s not only important, but it’s necessary to make the temporary provisions of tax reform permanent.