|
 |
|
|
|||
|
 |
|
Feb. 22, 2018 DTN Reports: Congress may be close to an agreement to replace the Section 199A language in the new tax law to curb the advantages for farmers selling products to cooperatives instead of private companies. Sen. Grassley, R-Iowa, told reporters on Tuesday he understands a possible fix would essentially give farmer cooperatives similar tax benefits that they had under the old Section 199, the Domestic Production Activities Deduction. That tax break amounted to roughly 9% of a cooperative's income, up to half the amount of wages paid by the cooperative. The co-ops then passed the benefits of that deduction down to farmer-members. "I think it has reached a point that there isn't a complete agreement, there's enough agreement within the Congress that if we can do what we originally intended to do of maintain(ing) the status quo for co-ops, we're going to go ahead do it even if the co-ops aren't completely satisfied with what we're doing," Grassley said. Basically the fix would be to reinstate the law was prior to the 2017 tax bill and reestablish the Production Domestic Activities Deduction the way it was over past 12 years. "It would not disadvantage private elevators like they have been since Christmas," Grassley said. Grassley said he anticipates the Section 199 change would be included in an omnibus spending appropriations bill that has a March 23 deadline. Now that lawmakers have agreed with President Donald Trump on a budget, the appropriations bills ideally won't be as big a battle to pass, Grassley said. The new Section 199A, if it were to stay in place, would translate into farmers getting a 20% deduction on all revenue or sales to a cooperative. The tax benefits of that have caused some grain companies to start forming cooperatives. One big question looms larger the longer the tax disparity goes on. When would Congress determine any new fix becomes law? Grassley expects that the bill is fixing a tax change that wasn't supposed to occur, so any Section 199A fix would be retroactive to the beginning of the year. "Seems to me like it would be retroactive but I don't know if it is written to be retroactive or not," Grassley said. It's fair to say there will be a lot of debate about that. Tweet |
|
|
|
|
|
|
|
|
|||||||||||||
