Cash accounting gives farmers and ranchers an important tool to expand their businesses and boost local economies. The recent strong bi-partisan effort by members of Congress to preserve the cash accounting system will help farmers and ranchers. The American Farm Bureau Federation (AFBF) praised the House and Senate leadership.
“We are pleased to see members of Congress reach across party lines and stand together for farmers and ranchers who are working to build their businesses and communities,” AFBF President Bob Stallman said in a news release.
But a recent proposal by the Senate Finance Committee would put a stop to cash accounting by requiring all businesses with annual receipts totaling $10 million to switch to the accrual method.
Senators and representatives from both sides of the aisle warned this would “create significant long-term financial hardship.” In letters to both House and Senate leadership, members from all 50 states called the cash accounting system fundamental to the success of small businesses across rural America. The letters were signed by 46 senators and 233 representatives.
AFBF supports preservation of current cash accounting rules.