A group of lawmakers recently supported legislation designed to provide fair tax treatment for all agricultural businesses.
Senate Finance Committee Chairman Orrin Hatch (R-UT) joined Sens. Chuck Grassley (R-IA), Pat Roberts (R-KS), John Thune (R-SD), and John Hoeven (R-ND) in issuing statements outlining their intent to level the playing field for farmers.
“The new, pro-growth tax law was designed to lift hard-working, middle-class families – whether they are farmers, ranchers or entrepreneurs – and the economy as a whole,” the lawmakers said. “After discovering an unintended consequence that created an inequity within the agricultural business community, we’ve worked extensively with stakeholders, our colleagues and the administration to develop a solution that will level the playing field and ensure the nation’s cooperatives, independent small businesses and publicly traded firms can fairly benefit from pro-growth tax reform.”
The legislators said the stakeholder-driven agreement achieves its intended goal and restores balanced competition within the marketplace.
“We’re committed to working with our colleagues to act swiftly on the measure and get it signed into law as soon as possible,” the lawmakers noted.
The agreement references cooperatives would be permitted to determine their deduction based on rules substantially similar to those under the old Section 199, including the flexibility of retaining a portion of their deduction to offset income at the entity level and/or pass through some or all of the deductions to their farmer-patrons.