Farmers might consider this an early Christmas present. Just before leaving office, the Senate overwhelmingly gave final congressional approval to reinstating more than 50 expired tax breaks, including the Section 179 expensing allowance that some farmers had been waiting on before buying new tractors and other equipment.
The so-called tax-extenders bill, which now goes to President Obama for his signature, also would revive a bonus appreciation allowance along with a series of tax incentives for wind energy and biofuels, including the $1-a-gallon credit that subsidizes biodiesel.
The tax breaks are only in place for a year – they will expire Dec. 31, 2015, because lawmakers were unable to reach a deal with President Obama for a longer-term extension. The bill, approved 76-16, was one of the last items left on the agenda of the lame-duck Senate.
The bill would extend the dollar-per-gallon Biodiesel Tax Incentive, as well as the Section 179 expensing provision that farmers and other business owners use when purchasing new equipment and infrastructure, among other items.
“Today’s passage of the tax extenders bill is a welcome relief to farmers as we close our books on 2014,” said Wade Cowan, a farmer from Brownfield, Texas, and the new president of American Soybean Association. “While it’s not the long-term fix we need, the legislation does include the dollar-per-gallon biodiesel tax credit, expensing for farm equipment and infrastructure under Section 179, and bonus depreciation on farm assets, all of which provide greater certainty and a more stable climate for the farmers and producers who make use of these programs.”
Cowan and other farmers are hopeful the new Congress that takes over in January will get to work on a longer-term tax extenders package.
“These aren’t solutions that benefit farmers in some years and not in others; we need them every year on every farm,” he said. “So we encourage both chambers of Congress to come together and find a solution that extends these beneficial provisions for the long term. What we need is certainty in the tax code, not a guessing game.”
Also included in the package was language from the House’s Achieving a Better Life Experience (ABLE) Act, which carried with it a provision to increase the barge fuel fee by 9 cents a gallon to fund needed waterways infrastructure projects. The fee, which is supported by those in the waterways industry, dedicates funds to new waterways infrastructure construction and major rehabilitation of the inland waterways system through the Inland Waterways Trust Fund.