The Tax Cuts and Jobs Act is set to expire at the end of the year if Congress doesn’t take action, eliminating many beneficial provisions for farmers and ranchers.

“If nothing is done, there will be a tax increase at the end of the year that will hit farmers and ranchers in the pocketbooks,” Dustin Sherer, director of Government Affairs for the American Farm Bureau Federation (AFBF) said. “Overall, ag will be taxed tens of billions of dollars more than they otherwise would, and we need to make sure that Congress does its job and makes these tax reforms permanent.”

The Tax Cuts and Jobs Act was passed in 2017 during the first Trump administration.

The act includes many provisions that are beneficial to lowering Americans’ tax bills.

“Sixty-five percent of American households across the country are going to see a tax increase in the trillions of dollars,” Sherer said.

Under the Tax Cuts and Jobs Act, Americans can claim an estate tax exemption of up to $11 million per person or $22 million per couple, indexed for inflation.

If the provision that expanded the exemption is allowed to expire this year, the exemption returns to $5.5 million per person and $11 million per couple.

“Repealing the death tax is the most effective way to protect the family farm and ranch legacy,” Laramie Adams, Texas Farm Bureau associate director of Government Affairs, said. “The death tax makes it difficult, and sometimes impossible, for family farms and ranches to continue on from one generation to the next without selling off land or equipment. It’s time to protect current and future generations by officially repealing the estate tax.”

There are still several steps to renewing the legislation, the first of which is the reconciliation process between the U.S. Senate and U.S. House.

“Feb. 20, the Senate passed its version of a budget resolution, which only dealt with some energy provisions, some border policy and some additional defense spending,” he said. “And then the following week, the House passed a budget resolution that’s aimed toward having one big, beautiful bill, as Speaker Johnson and President Trump have referred to it, and so that happened on Feb. 25.”

If the estate tax is not eliminated, instead of spending money to improve their operations, farmers and ranchers, along with all small businesses, will be forced to continue to divert resources to pay for estate planning to account for a shifting and unpredictable tax code.

The issue remains a priority for Texas Farm Bureau.

Read more about the impact the expiration of the Tax Cuts and Jobs Act would have on farmers and ranchers in this Market Intel report.