Farm groups on Wednesday welcomed congressional extension of tax breaks for 2014 equipment purchases and biodiesel production incentives, but said the last-minute action doesn’t solve long-term problems.
American Farm Bureau Federation President Bob Stallman said farmers need more than the “temporary fix” provided by the Senate’s approval of the bill.
“They need certainty that these provisions will be there in the coming years as they make long-term business decisions,” Stallman said in a prepared statement. “Farm Bureau looks forward to working with Congress to ensure agriculture can count on these tax provisions not just this year, but every year.”
Producers were most concerned about Section 179 of the tax code, which allows farmers and other business owners to upgrade machinery, property and software and deduct the full cost in the year it is put into service, instead of depreciating it over time. The legislation retroactively restores deductions on up to $500,000 of capital investments in 2014 – the limit had been lowered to $25,000 this year. But the legislation expires at the end of the year, meaning Congress will have take up the issue again in 2015.
Bob McCan, president of the National Cattlemen’s Beef Association, said producers “need stability in the tax code in order to make sound business decisions.”
Gail McSpadden Greenman, national affairs director for the Oregon Farm Bureau, said the late action by Congress leaves producers with only two weeks to pull the trigger on equipment purchases. Many couldn’t afford to buy equipment without the ability to take a full deduction in the year of purchase rather than rely on depreciation, she said. The state Farm Bureau strongly supported the legislation, Greenman said.
The bill also extends the dollar-per-gallon biodiesel tax incentive. In a prepared statement, American Soybean Association President Wade Cowan said the action “is a welcome relief to farmers as we close our books on 2014.”