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 Mar. 9, 2018 POLITICO reports: Many weeks after the problem was discovered, lawmakers have reached a final agreement to fix a section of the new tax law that created huge financial incentives for farmers to sell their products to agriculture co-ops. The deal was circulating among lawmakers and industry stakeholders on Wednesday, according to Sen. John Thune (R-S.D.). The senator, who holds the third-highest ranking Republican leadership post, told reporters that the legislative language is done and just needs sign off from key negotiators before being shared publicly, Pro Ag's Catherine Boudreau reported. "I think everybody is in pretty good shape," Thune said. "I'm sure there is not 100 percent unanimous consent, but the organizations we are working with, both on the private grain elevator side and co-op side, have been involved in all of this. So I think we are about there." A ride in the next spending bill: The tentative agreement is expected to be included in the fiscal 2018 omnibus appropriations package that Congress must pass before March 23 to keep the government open. "If this drags out any longer, it will create a lot of problems," Thune said. The predicament: The section in need of fixing is known as Section 199A, a special deduction for agricultural co-ops that Thune and Sen. John Hoeven (R-N.D.) hastily added to the tax overhaul in the final rounds of negotiations in order to preserve certain benefits in place under the previous tax code. The language allows farmers to deduct up to 20 percent of their gross sales to cooperatives - a more lucrative tax break than if they were to sell to a privately held grain elevator or other type of company, which would allow a smaller deduction of 20 percent of a farmer's income. Thune, Hoeven and House GOP leadership have been working with the National Council of Farmer Cooperatives and National Grain and Feed Association on a solution to avoid unbalance in the marketplace. The parties were looking at reverting back to the old deduction for co-ops, known as Section 199, which allowed a roughly 9 percent tax break. Co-ops often passed that on to their farmer members. Tweet |
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