LINCOLN, Neb. – After several years of dealing with uncertainty and a temporary fix, Nebraska farmers and ranchers would benefit from permanent action on several key tax provisions if Congress acts to adopt a tax extender package and omnibus spending bill that is likely to be taken up by the House and Senate in the coming days, said Nebraska Farm Bureau President Steve Nelson, Dec. 16.
“The tax extender package includes some critical business management tools for Nebraska farmers and ranchers, namely Section 179 small business expensing and bonus depreciation,” said Nelson.
The proposed permanent Section 179 allows small businesses to deduct up to $500,000 of new or used business purchases rather than depreciating the cost over a longer period of time. Bonus depreciation allows for an immediate 50 percent deduction of new capital purchases for the next few years. These provisions allow farmers, ranchers and other small business owners’ greater flexibility to control their cash flow, particularly as it relates to making larger investments in must have equipment and machinery for their operations.
“These are vital tools for small businesses, particularly those subject to great fluctuation in their income,” said Nelson.
The Omnibus spending bill also includes important provisions for agriculture, namely language to eliminate USDA’s Country of Origin Labeling (COOL) program for beef and pork. The measure is critical to address the $1 billion in tariffs that are to be placed on U.S. beef and pork exports to Canada and Mexico after rulings that the U.S. COOL program failed to meet World Trade Organization (WTO) parameters.
“We’ve long supported a COOL program that was WTO compliant, but our current program does not meet those requirements. We could not afford to put beef and pork producers at risk in the face of these tariffs,” said Nelson.