A tax relief package that could have benefits for Michigan’s farmers passed the House of Representatives last week and now heads to the Senate for consideration.
The bill is called The Tax Relief for American Families and Workers Act. It restores tax provisions that were left out of tax reform efforts back in 2017.
Dustin Sherer, Government Affairs Director with the American Farm Bureau Federation, says the legislation includes provisions that could have a positive impact on farmers and ag businesses.
“The biggest of which is 100 percent expensing or bonus depreciation, which allows you to immediately write off investments in your business when you purchase equipment or build infrastructure,” says Sherer. “It’s probably one of the most pro-growth policies that we can put in the tax code and farmers lost the ability to buy new equipment under 1031 Like Kind Exchanges in the 2017 tax reform.”
He says it’s important that your lawmakers make the fix now ahead of the tax cliff in 2025.
“These provisions were only extended for a couple of years from 2017 when they changed, others like bonus depreciation started to phase down,” he says. “And so, getting this done now, generally, you can make tax policy retroactive for a year before you get too deep in the following year’s filing season. And that’s what this bill does, that provision and a couple others including deductibility, and R&D expensing, retroactive to the beginning of 2023 before we get deep into this particular filing season.”
Sherer says that American Farm Bureau is encouraging Michigan farmers to reach out to Senators Debbie Stabenow (D-MI) and Gary Peters (D-MI) and urge them to pass this legislation.
“Those things affect farmers’ and ranchers’ bottom lines, especially in times of high costs and thin margins. Tell them your story and let them know that it is vital that they get this done.”
Source: NAFB News Service