Tax Extender Bill Impacts Farming Communities

Dec 18, 2014
WASHINGTON, DC -- On Tuesday, the Senate passed H.R. 5771, the Tax Increase Prevention Act of 2014.  The $42 billion tax package applies tax breaks to the 2014 tax year, retroactively and until December 31, 2014.  Included in the legislation was an extension for Section 179, which according to Senator John Hoeven (R-ND) is "one of the most important provisions in the act" and provides a "depreciation and expensing provision for small businesses," including farms.  Section 179, which has been reinstated to the original limit of $500,000, allows small business owners to immediately depreciate 100 percent of a capital purchase, avoiding the hassle of depreciation over time and simultaneously lowering taxable income.   
In addition to the extension, the bill reinstates 50 percent bonus depreciation, which allows for capital purchases of any size to be depreciated 50 percent in the first year.  Though the extension leaves long-term tax issues unresolved, Hoeven said, "the short-term solution will allow farmers and other small businesses to expense and depreciate property they have purchased or repaired for their operations."
Louisiana rice producer and USA Rice Producers' Group Chairman John Owen emphasized how important the extension is not just to farmers, but to rural communities. 
"Section 179 is hugely important to small business owners and is a big boost to rural communities.  The $500,000 limit encourages farmers to invest in machinery and improve their operating efficiency, which results in improvements to rural infrastructure that are key to keeping small businesses strong," Owen said.
Contact:  Evan Spencer (703) 236-1476