Stockmen's Association calls for extending tax incentives
BISMARCK -- Farmers and ranchers are again fighting for tax code changes. The North Dakota Stockmen's Association urged Congress this week to address expired tax provisions it calls "critical for ag operations." Last year, producers fought to mai...
BISMARCK -- Farmers and ranchers are again fighting for tax code changes.
The North Dakota Stockmen's Association urged Congress this week to address expired tax provisions it calls "critical for ag operations."
Last year, producers fought to maintain tax write-off levels for claiming business expenses on taxes. Though many will likely make fewer major purchases this year while crop prices are down, industry officials say these tax incentives are important and aim to make them permanent.
"Ranchers rely on consistent and predictable tax code when planning purchases, investing in their operations and growing their businesses," NDSA President Steve Brooks, a cow-calf and seedstock producer from Bowman, said in a statement. "It is difficult to make sound business decisions with the uncertainty that exists."
Without Section 179 tax extenders, which expired Dec. 31, 2014, small businesses and producers are only allowed to expense $25,000 of purchases, with the rest depreciated over time. NDSA wants Congress to restore maximum expensing to $500,000. It is also urging restoration of 50 percent bonus depreciation for the purchase of new assets, including agricultural equipment and buildings.
Brooks said provisions that allow producers to write off a greater portion of capital expenditures in the year their purchases are made rather than depreciating the purchases over a long period time encourages investment and makes paper work less complicated.
Sen. John Hoeven, R-N.D., said he is confident Congress will be able to extend Section 179 provisions and other tax extenders by year end as part of a two-year package but agrees those expensing levels should be made permanent.
Hoeven said Congress tried to make the Section 179 extenders permanent last year but faced presidential opposition.
"It may not get used as much with prices down but that's why it's important that we extend it, because it does encourage investment," he said.
Julie Ellingson, executive vice president of the North Dakota Stockmen's Association, said, with the calendar ready to flip to another year, the sooner action is taken, the better, as many producers meet with tax planners to make last-minute purchase decisions.
"Failure to renew these important tax extender provisions will place an added burden on North Dakota ranch ag families and other small businesses who are traditionally asset-rich and cash-poor," Brooks said.