Nov 21, 2017House passes tax reform bill
Last week on Nov. 16, the House of Representatives passed its version of tax reform by a 227-205 vote. The National Potato Council highlighted some provisions of possible interest to growers.
The House’s version immediately raises the estate tax exemption from $5.49 million to $10 million and eliminates the tax entirely in five years. It also slashes the corporate tax rate from 35 percent to 20 percent, and sets the top small business tax rate at 25 percent for pass-through entities. The House also enhances the Section 179 immediate expensing provision from the current cap of $500,000 per year to $5 million per year.
Now the Senate will attempt to pass their version of a bill and reconcile the differences with it and the House before the end of the year. Also last week, the Senate Finance Committee reported out a bill that the NPC said “generally slims down some of the more generous provisions in the House bill and/or delays their implementation to reduce the overall cost to the treasury.”
For example, the Senate places a two-year window on net operating losses for certain farming losses, where the House has no such limitation. Also, the Senate’s estate tax provision is increased from $5.49 million to $10 million retroactive to 2011. However, they do not follow through with the House’s outright estate tax repeal after five years.
Both bills repeal the Section 199 “Domestic Production Activities Deduction” that is utilized heavily by farmer cooperatives and other entities that generate substantial W-2 wages. NPC signed on to a letter this week with 180 other agriculture organizations objecting to the repeal of this tax incentive for American farmers.