WASHINGTON, D.C. — Farm and business groups have a Christmas wish for Congress: Reinstate Section 179 expensing and bonus depreciation provisions before year’s end. But until lame duck legislators take any legislative action, counting on any such tax breaks for 2014 is a gamble.

More than 40 farm groups – from the American Farm Bureau to the USA Dry Pea and Lentil Council – sent Congress a joint letter Nov. 18 supporting the renewal of Section 179 small business expensing and bonus depreciation. Section 179 expensing allows businesses to write off up to $500,000 in capital expenditures in the year purchases are made.

The expired bonus depreciation allowed claiming up to 50 percent of new capital purchase expense in the purchase year. Current law allows for a $25,000 capital expense deduction and no bonus depreciation.

The two tax extenders are good for agriculture, said Jim Reed, chair of the National Corn Grower Assoc. Public Policy Action Team.

“Farming requires significant investment in machinery and equipment,” he said. “That’s why it’s so important we have tax provisions that allow farmers to take advantage of good years, invest in their operations and streamline their recordkeeping.”

Discussions are ongoing between the House and Senate to arrive at a final tax extenders bill. “With the elections behind us, it’s now time to get to work and get the extenders bill done,” said Sen. Chuck Grassley (R-Iowa), who criticized Congress for again waiting until the end of the year to address the tax extenders package.

“It’s time to put an end to the annual kabuki dance that is tax extenders. Good tax policy requires certainty that can only come from long-term predictable tax laws. Businesses need certainty in the tax code so they can plan and invest accordingly.”

Congress has passed tax extenders before, but there is no guarantee this year’s lame duck session will do so.

“Whether or not any changes happen between the election and the end of the year is anyone’s guess,” said Larry Gearhardt, director of The Ohio State University Tax Schools.

One thing is certain: The two tax benefits would apply only to purchases made this year. “If a farmer bets on Section 179 being increased and bonus depreciation returning, he should take action prior to the end of the year,” said Gearhardt. “If he waits until 2015 to purchase that new tractor, it is too late to adjust 2014 taxes.”

The Nov. 18 letter was not the first call from agriculture groups to reinstate tax extenders. In a Nov. 5 statement, Roger Johnson, president of the National Farmers Union (NFU), supported them.

“NFU will strongly pursue the extension of expiring tax provisions for small business expensing, and renewable energy during the upcoming lame duck session of Congress,” he said. “Family farmers and ranchers rely on these provisions that are critical to managing their business.”

Johnson added NFU will work with members of Congress from both parties to solve issues important to family farmers and ranchers.

Not just agriculture

Support for tax extenders is not limited to ag. The Broad Tax Extenders Coalition – more than 500 organizations from across business and industry, including the American Farm Bureau Federation – also urged Congress last week to support renewing expiring tax provisions.

“Renewing the tax extenders will provide a bridge of certainty and predictability for manufacturers until Congress can act on comprehensive tax reform,” said National Assoc. of Manufacturers Vice President of Tax and Domestic Economic Policy Dorothy Coleman.

Section 179 and bonus depreciation are just two items the Coalition wants reinstated; research and development (R&D) tax credits are also popular, especially among technology and manufacturing firms.

“Technology startups are the innovation engine of our economy,” said Alan Baratz, CEO of AlertGPS in Scottsdale, Ariz. “As they grow from pre-revenue to profitability, it’s important that the R&D tax credit continues to be available to help fuel the investments required to deliver leading-edge, compelling and valuable new products.”

Another popular tax credit that could be extended with lame duck action is food donation. “Passage of this legislation will make it easier for farmers, retailers, restaurants and food manufacturers to donate millions of pounds of food to food banks across our country,” said Carrie Calvert, director of tax and commodity policy for Feeding America.

“Because of the uncertainty surrounding the food donation tax deduction, potential donors will often send surplus food to landfills or to be used as animal feed, instead of donating to their local food bank.”

Grassley, who said he had heard rumors some were working to leave out or shorten the extension for the wind production tax credit, voiced his support for that credit from the Senate floor on Nov. 20.

“It seems as though opponents of wind energy have tried at every turn to undermine this industry, and so I’m not surprised that they’re at it again,” he said. “I authored the wind incentive in 1992.  I know it won’t go on forever.  It was never meant to, and it shouldn’t.”

Grassley said he welcomes discussion. “I’m happy to discuss a responsible, multiyear phase-out of the wind tax credit. But, any phase-out must be done in the context of comprehensive tax reform, where all energy tax provisions are on the table. And it should be done responsibly over a few years, to provide certainty and ensure a viable industry.”