Ag Related Tax Reform Differences Between House and Senate

 

Ag-related tax differences are among many the House and Senate will have to work out, provided the Senate follows the House in passing a tax reform bill. Senate Republicans must win the votes of 50 of their 52 members, with the Vice-President expected to break a tie. But at least three Republicans were not saying how they’d vote, while one was demanding changes to the GOP tax bill.

American Farm Bureau’s Pat Wolff…

“The bill was voted out by the finance committee Thursday night.  There was a last minute change to the bill, and it’s not likely to be the last change to the bill.  We hear every day about Republican Senators expressing concerns.  So, there’s not for sure a majority of senators that will vote for this package.”

That could lead to further changes in the package, even through floor action. Among key GOP disputes: The Senate bill’s ending the Obamacare individual mandate and deductions for all state and local taxes, but on that score…

“That doesn’t impact the farm business, because all the state and local taxes will be able to be deducted by the farm business on the Schedule F.  We don’t know what will pop up, but we don’t think that any of the provisions important to farmers and ranchers are in danger.”

But while both chambers’ bills double the estate tax exemption, the House bill ends the tax in ten-years, while the Senate ends the exemption in ten-years. Also…

“The Senate bill includes an exclusion for 17% of business income, and the House system where income is divided into two categories.  Farm income would either be a return on investment or a return on labor, and depending on how the division is, the taxes will be different.”

The House meantime, boosts the Section 179 small business expensing break to 5-million dollars for just 5-years. The Senate break goes to 1-million for ten-years.

The biggest GOP challenge: complying with budget limits that allow Republicans to pass their bill with no Democratic votes, thus the sunsetting of key tax breaks, likely to be a sticking point with the House in working out a final bill.


A native of the Texas Panhandle, Rhonda was born and raised on a cotton farm where she saw cotton farming evolve from ditch irrigation to center pivot irrigation and harvest trailers to modules. After graduating from Texas Tech University, she got her start in radio with KGNC News Talk 710 in Amarillo, Texas.