Farm and ranch owners are urging their Congressional delegations to support S. 1149, which is sponsored by Sen. Steve Daines and co-sponsored by Sens. Pat Roberts, R-KS and John Thune, R-SD.
This legislation will make permanent the Section 199A qualified business income deduction, which is set to expire after 2025.
The 199A deduction allows a business that operates as a sole proprietorship, partnership or S-corporation to take a tax deduction of up to 20 percent of qualified business income.
According to a press release, USDA’s Economic Research Service estimates that had the deduction been available in 2016, almost half of farm households collectively would have been able to save $9.6 billion. If it expires, it’s stated that a huge tax increase would be imposed on farm and ranch businesses nationwide.
“Tax savings are critical to farm and ranch businesses which already operate on thin margins let alone having to deal with the uncertainty of markets and weather. The volatility of both of those factors have recently hit ag producers especially hard,” said Cyndi Johnson, chair of the Montana Farm Bureau Federation Tax Committee. “Farm Bureau believes they should not have to deal with uncertainty caused by expiring tax deductions. In this environment of ambiguity, I know this deduction can provide at least a small token of assurance for the majority of rural American businesses. For this and all the reasons above, we support a permanent Section 199A deduction.”
According to www.congress.gov, the latest action for the legislation was April 11, 2019, and involved two readings and referral to the Committee on Finance. Text of the legislation is not available on the site yet.