Appeals Court Hears Landmark Tax Case Regarding CRP
AMES, Iowa – Last week, the Eighth Circuit U.S. Court of Appeals heard oral arguments in Morehouse v. Commissioner of Internal Revenue, according to DTN.
This is a landmark tax case that would set a precedent for absentee landowners with Conservation Reserve Program contracts and potentially redefine tax treatment of cash rents, conservation easements and other types of passive income, if allowed to stand. Initially, the Tax Court ruled taxpayers could be subject to self-employment taxes just by signing a CRP rental contract, which shocked those who have advised farm investors they were exempt from the 15.3 percent tax, if they weren?t otherwise materially participating in an ag business.
Iowa State University Center for Agricultural Law Director Roger McEowen says essentially, the IRS is arguing that any time someone enters into an activity with a profit intent, it will be subject to a 15.3 percent self-employment tax. Conservation groups are concerned the new tax would encourage CRP contract cancellations.
Currently, 27 million acres remain under long-term CRP contracts, with an estimated one third of landowners in some Great Plains and Midwest states being non-farm investors or non-active farmers. If the case is overturned on appeal, McEowen says individuals who paid the 15.3 percent tax on their 2013 returns could be eligible for a refund.
USDA Moves Forward with PEDv Vaccine
WASHINGTON – Senate Ag Committee Chairwoman Debbie Stabenow applauds USDA for its continued commitment to combatting the spread of porcine epidemic diarrhea virus (PEDv), which has impacted pork producers across the country.
USDA has moved forward with a new vaccine that is expected to combat PEDv and has issued a conditional license for it. Stabenow says the unmitigated spread of the virus not only threatens the agricultural economy, but also has serious implications for the national economy as consumers and businesses will all feel the impact of diminishing swine herds.
She says the pork industry supports nearly 550,000 jobs across the U.S. and contributes $34.5 bilion to the U.S. economy. USDA?s efforts to help control the spread of the virus will go a long way in stabilizing the potential fallout for consumers and businesses, according to Stabenow.
Stabenow Says Ag and Manufacturing At Heart of U.S. Economy
WASHINGTON – Chairwoman Stabenow also hosted a Grow It Here, Make It Here hearing for the Senate Ag Committee hearing on Tuesday.
Stabenow says more than 3,000 companies in the U.S. either manufacture or distribute biobased products, meaning they create new products from American-grown ag crops, like soybeans and corn, instead of using petroleum-based chemicals to manufacture products. She says this shift toward using bio-degradable and renewable materials domestically grown displaces the need for foreign-based petroleum, and helps to create American jobs.
In the 2014 Farm Bill, Stabenow says new opportunities to support biobased manufacturing were created so innovators in rural and urban American could continue growing their businesses and creating jobs. She says agriculture and manufacturing are at the heart of the U.S. economy and are the foundation of the middle class. In conjunction with the hearing – 35 biobased companies and organizations from 25 states displayed their work and provided firsthand insights into how important biobased manufacturing has been in growing their manufacturing operations.
The Senate has provided a webcast of its hearing, available on its website by clicking here.
Lean Finely Textured Beef Sales Begin Rebound
MINNEAPOLIS – Beef Products Incorporated and Cargill say their sales of lean finely textured beef have started to rebound after roughly two years have passed since public backlash from critics labeling it as pink slime, according to the Sioux City Journal.
Cargill Director of Communications Mike Martin says the company has about 400 customers for lean finely textured beef, which is more than it had before the controversy in 2012, but he says the amount of product they are purchasing is much less than before. Since March 2012 – sales have tripled – but Martin says they are still about 40-percent lower than they were before that time.
The renewed interest in using the product seems to be a result of rising beef prices, but Cattle Buyer?s Weekly Publisher Steve Kay says it?s also due to Americans? insatiable appetite for ground beef in all its forms. Martin says Cargill conducted consumer research with more than 3,000 Americans who purchase and consume ground beef during the controversy in 2012, and found that once they knew the facts about the product and the USDA-approved process to make it, they were comfortable with finely textured beef in their ground beef.
New Resource Available to Help Growers Take Action on Weeds
WASHINGTON – The National Corn Growers Association has added a Take Action on Weeds section to its website. The resource, which was developed by the United Soybean Board, offers a variety of information to help farmers combat weed resistance through best management practices.
NCGA Trade Policy and Biotechnology Action Team Chair Jim Zimmerman says the increased exposure of USB?s Take Action program comes at a fortuitous time as many herbicide resistant cropping systems currently are under consideration by USDA and the Environmental Protection Agency. He says the Take Action program demonstrates the proactive measures the industry is taking to monitor itself and constantly push for the adoption of ever-evolving best management practices.
NCGA has more on the Take Action Program; click here to learn more.
The above stories are provided courtesy of the National Association of Farm Broadcasters New Service, powered by the American Farm Bureau Federation.
