ND group urges Congress to address tax provisions
November 24, 2015
The North Dakota Stockmen's Association (NDSA) is urging the U.S. Congressional delegation to take up legislation to address expired tax provisions extenders that are critical for ag operations soon. NDSA President Steve Brooks, a cow-calf and seedstock producer from Bowman, N.D., said the tax provisions that expired Dec. 31, 2014, are essential for long-term business planning on North Dakota ranches.
"Ranchers rely on consistent and predictable tax code when planning purchases, investing in their operations and growing their businesses," Brooks said. "Producers make significant financial decisions on an annual basis, and it is difficult to make sound business decisions with the uncertainty that exists. Congress' failure to act on permanent tax reform has left ag operations to rely on this extender legislation."
Agriculture requires significant investments in machinery, equipment and other depreciable assets and, because of this, the NDSA is focused on Section 179 small business expensing and bonus depreciation provisions that allow producers to write off a greater portion of capital expenditures in the year their purchases were made rather than depreciating the purchases over a long period time, Brooks explained. The measures provide an incentive for farmers and ranchers to invest in their businesses and lower the record-keeping burden associated with depreciation.
Without the Section 179 tax extenders, small businesses and producers are allowed to expense only $25,000, adjusted for inflation, with the rest of the expenditure depreciated over time. The NDSA is encouraging Congress to restore the $500,000 maximum expensing amount as it was set in 2014 under Section 179.
The NDSA is also urging Congress to restore the 50 percent bonus depreciation for the purchase of new capital assets, like agricultural equipment and buildings.
"Failure to renew these important tax extender provisions will place an added burden on North Dakota ranch ag families and other small businesses who are traditionally asset-rich and cash-poor," Brooks said. "We urge Congress to act quickly."
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–North Dakota Stockmen's Association