House and Senate clear major tax reform hurdles
Now that the House and Senate have approved separate tax reform legislation, lawmakers from both chambers will have to compromise on a single measure to send to President Donald Trump for his signature.
Farm Bureau praised both bills for bringing Congress one step closer to a tax code that works for everyone in agriculture.
“Farm Bureau looks forward to the Senate and House reconciling the differences between their respective versions in conference to achieve a final tax reform package that addresses the needs and concerns of farmers and ranchers and boosts economic growth in rural America,” American Farm Bureau President Zippy Duvall said in a statement.
The bills overlap on some key provisions for farmers and ranchers, including the continuation of immediate expensing, business interest deduction and cash accounting. In addition, both bills would double the estate tax exemption to $11 million per individual indexed for inflation. The House bill would permanently repeal estate taxes in 2024, but that provision is unlikely to be included in the final measure. Another difference on estate taxes is that the Senate bill indexes the exemption for inflation only through the end of 2025.
One of the biggest questions for people involved in agriculture is how the compromise legislation will treat pass-through business income, which is income reported by farmers and ranchers who file under sole proprietorships, partnerships and S-corporations. The Senate bill provides a significant deduction for business profits, while the House only provides a lower rate for a third of farm and ranch profits.
Lawmakers are optimistic a final bill will be approved before Christmas.
–American Farm Bureau Federation