Search Site   
Current News Stories
Solar eclipse, new moon coming April 8
Mystery illness affecting dairy cattle in Texas Panhandle
Teach others to live sustainably
Gun safety begins early
Hard-cooked eggs recipes great for Easter, anytime
Michigan carrot producers to vote on program continuation
Suggestions to celebrate 50th wedding anniversary
USDA finalizes new ‘Product of the USA’ labeling rule 
U.S. weather outlooks currently favoring early planting season
Weaver Popcorn Hybrids expanding and moving to new facility
Role of women in agriculture changing Hoosier dairy farmer says
   
News Articles
Search News  
   

House OKs bill to keep tax depreciation for purchases

 

 

By MICHELE F. MIHALJEVICH

Indiana Correspondent

 

WASHINGTON, D.C. — A bill ushered in by the U.S. House earlier this month that makes the 50 percent bonus depreciation permanent on new purchases would benefit farmers and others in business, a representative for the legislation’s sponsor said. The measure, H.R. 4718, makes permanent a section of the tax code allowing businesses to deduct 50 percent of the cost of new capital investments in the first year. The House passed the bill July 11 by a vote of 258-160.

Bonus depreciation has been around since 2002 and, along with several other tax code provisions, has been extended multiple times, said Breann González, communications director for the bill’s sponsor, U.S. Rep. Patrick Tiberi (R-Ohio). The most recent extension of the bonus depreciation expired Dec. 31, 2013.

The permanent bonus depreciation would make planning easier for businesses, González said.

"Congressman Tiberi heard from employers all over the district, the state and the country, and they said in order to best create a business plan, they need some certainty," she explained. "They need to know what resources will be available. If you need to have those tax benefits but if you don’t know if they’ll be available, you can’t go ahead and make a purchase."

Tiberi’s district covers all or parts of seven counties – Delaware, Franklin, Licking, Marion, Morrow, Muskingum and Richland. He has been contacted by farmers who told him tax certainty was important as they considered buying a new piece of equipment, González noted.

"This measure is about providing certainty for employers and encouraging them to grow their businesses and hire more workers," Tiberi said in a statement after the House passed the legislation. "Time and again Ohio employers have described how this measure, allowing them to immediately deduct half the cost of their equipment purchases, frees up more money to invest in their businesses. Making it permanent allows employers to effectively plan for their future and incentivizes them to grow and create jobs."

Tiberi is hopeful the Senate will consider the legislation, González said, though Sen. Ron Wyden (D-Ore.) has said he is interested in passing another temporary measure. Wyden is chair of the Senate Finance Committee.

In a letter to members of the House dated July 9, a collection of more than 100 organizations representing Chambers of Commerce, businesses and manufacturing said making the bonus depreciation permanent would "spur much-needed economic growth and jobs and provide a bridge to broader tax reform."

Continued uncertainty about bonus depreciation "is discouraging investment in the United States and, in some cases, keeping companies totally on the sidelines," the letter read. "This impacts both companies that make investments and companies that manufacture capital equipment."

Included on the list of organizations that signed the letter are the American Farm Bureau Federation (AFBF), the Assoc. of Equipment Manufacturers and the Corn Refiners Assoc.

In a separate letter, AFBF President Bob Stallman said farmers and ranchers place a great value on tax code provisions that allow them to write off capital expenditures in the year those purchases are made.

"Tax provisions that accelerate expensing and depreciation allow farmers and ranchers to better manage cash flow, minimize tax liabilities and reduce borrowing," his letter stated. "The ability to immediate expense capital purchases also offers the benefit of reducing the recordkeeping burden associated with depreciation."

The Tax Foundation, a nonpartisan research think tank based in Washington, D.C., said bonus depreciation would create 212,000 jobs and increase investment and wages. The organization expects the economy to grow by 1 percent, thus adding $182 billion, thanks to bonus depreciation. Federal revenue would increase 23 percent a year in the long run, the foundation stated.

7/30/2014