WASHINGTON and ATLANTA, Il. – Tax extenders could be a bipartisan rallying point during the congressional lame-duck session, which could be to the benefit of the American farmer.
As Congress settles into its lame-duck session before new legislators head to Capitol Hill, lawmakers are looking for bipartisan bills to work on; one of those is a package of 53 expired tax breaks, collectively called “tax extenders.”
The tax extenders bill has supporters on both sides of the aisle, and contains section 179 expensing, which allows farmers and others to write off up to $25,000 on equipment purchases. That’s 95 percent less of a write-off than last year, when producers could expense up to $500,000 on equipment in the same year it was purchased.
Iowa Senator Chuck Grassley says both Senate Finance Chair Ron Wyden and House Ways and Means Chair Dave Camp are working to avoid a conference on tax extenders to speed it through both houses.
“It was up in June,” says Grassley, “and it had some amendments that Reid didn’t like. So he took the bill down, he said it was coming up in November and December, and I haven’t talked to the chairmen of the committee, but I have heard there’s been some negotiations between the House and Senate to get the same language, so we have just one tax bill instead of having a conference between the House and Senate and with those things going on, I think we’ll be able to get it passed yet this year.”
A $500,000 write-off incentivizes equipment purchases like farm machinery, which is something Michael Schmidt of Central Illinois Ag, a Case IH Dealership headquartered in Atlanta, Illinois, recognized was needed for his business when he was making farmer visits back in early October.
“We have a lot of inventory. A whole lot of the other dealers have a lot of inventory,” said Schmidt. “Three-dollar corn and ten-dollar soybeans are not going to cut it at today’s production levels. Section 179 is going to be desperately needed to come back from the government, for the bonus depreciation, otherwise, I don’t see a whole lot of purchases being made between now and the end of this year. “
Lucky for Schmidt, the office of Illinois Senator Dick Durbin has confirmed he supports the legislation as presented. Grassley says he will vote on the bill if it gets through this year, but if not, he expects it back on the agenda early next year.
Todd Gleason with the University of Illinois contributed to this report. Hear more about tax extenders in the 113th Congress’ lame-duck session by clicking the audio player above this story.
