As soon as the Senate handles the Republican Health Care Plan, attention will turn to tax reform. Farm state senators are focusing on a shorter depreciation schedule for farm machinery to help growers and manufacturers.
A bipartisan Senate bill would help farmers replace worn equipment faster and encourage new job-creating purchases.
Senate Agriculture Chair Pat Roberts (R-KS) and Ag Democrats Amy Klobuchar (D-MN) and Jon Tester (D-MT) want a five-year depreciation schedule instead of the current seven years for certain Ag equipment.
American Farm Bureau has pressed for same-year business expensing and so-called, ?like-kind? expensing to replace worn equipment.
?If I could get one, I would take one,? AFB Senior Economist Bob Young said. ?I want that number to be as small as I can get it to be.?
The U.S. Department of Agriculture?s Farm Service Agency says on average, farmers and ranchers finance farm equipment for five-years. Young says the quicker producers can turn around farm equipment, the quicker they can put more modern machines into service
?That technology has come on board really quickly, whether it be precision agriculture or the way we?re able to put the seed in the ground,? Young said.
AFB tax adviser Pat Wolff said earlier, the White House was not clear in its tax plan on business deductions.
?Like whether or not farmers would be able to use ?like kind? expensing or cash accounting,? Wolff said. ?Those details are yet to be determined
Chairman Roberts says his proposed tax code change would allow for ?predictability and fairness? and let producers produce ?more efficiently at a lower cost.?
