Budget bill extends tax provisions, ends COOL
Farmers will see many benefits from a year-end spending bill passed last week by Congress, including the extension of a package of key farm tax provisions and repeal of country-of-origin labeling for meat, said American Farm Bureau Federation President Bob Stallman.
However, the legislation failed to include two provisions farmers had hoped would be included — one stopping the harmful Waters of the United States (WOTUS) rule and another that would have set a nationwide standard for labeling of food containing genetically modified ingredients.
"We are truly disappointed that Congress did not include legislation to stop implementation of WOTUS," said Stallman. "The courts have already expressed serious legal concerns about the rule. We remain committed to working with Congress to stop EPA and help America’s landowners, businesses and state and local governments avoid years in court to overturn the rule."
Additionally, Congress’s failure to act on the biotech labeling bill opens the door to a patchwork of state labeling mandates beginning as early as next month, which will bring higher costs to farmers and consumers, Stallman said.
The omnibus appropriations measure, which provides $1.149 trillion to fund the government through the end of this fiscal year, became a catch-all bill for many legislative issues that needed to pass before the end of the year.
The House passed the tax extender bill and 2016 omnibus appropriations bill separately, while the Senate lumped them together in one package. All four Iowa House members voted in favor of the tax extender bill, but only Democrat Dave Loebsack supported the appropriations measure. In the Senate, both Sens. Chuck Grassley and Joni Ernst opposed the combined measures.
The fiscal year (FY) 2016 Omnibus Appropriations bill provides $1.149 trillion to fund the government through the end of this fiscal year. Additionally, the legislation repeals country-of-origin labeling requirements, preventing Canada and Mexico from initiating retaliatory actions after the program was found to violate World Trade Organization (WTO) rules.
"Farm Bureau supports COOL programs that are in line with world trade rules," Stallman said. "Current COOL programs, unfortunately, risk serious retaliation by Canada and Mexico now that the World Trade Organization has approved more than $1 billion in tariffs against American beef, pork and other U.S. commodities if COOL is not changed."
Several key farm tax provisions were extended, including language on Section 179 and bonus depreciation. The bill permanently sets the Section 179 small business deduction for capital expenses at $500,000, instead of $25,000. The provision is retroactive for 2015.
Bonus depreciation was extended for five years at 50 percent for 2015-2017, 40 percent in 2018 and 30 percent in 2019.
"This tax extender package gives farmers and ranchers critical tools to help them reinvest in their businesses," Stallman said. "Tax provisions like Section 179 small business expensing and bonus deprecation free up cash flow for farmers and ranchers to put their money to work. New provisions will let our members make important upgrades that reduce costs, increase efficiency and help make their businesses sustainable for generations to come."
The bill provides more than $850 million in funding for conservation programs, including the Conservation Stewardship Program (CSP) and Regional Conservation Partnership Programs (RCPP). It also keeps production tax credits for wind and other renewables through 2016.
The credit would be reduced by 20 percent for projects for which construction starts in 2017, by 40 percent for projects that begin construction in 2018 and by 60 percent for projects that start construction in 2019.
Other provisions include:
•Ensuring dietary guidelines are based on significant scientific agreement and are focused on nutritional and dietary information. The provision also requires a review of the process to ensure a balanced and scientific process in the future.
•Extends through 2016 the $1.01 per gallon income tax credit for cellulosic biofuel sold for fuel plus the additional first-year 50 percent bonus depreciation for cellulosic biofuel production facilities.
•Extends through 2016 the niodiesel and renewable diesel $1 per gallon tax credit, the 10 cents per gallon small agri-biodiesel producer credit; and the $1 per gallon tax credit for diesel fuel created from biomass.
•Includes $894.4 million for the Animal and Plant Health Inspection Service, including $3 million for avian influenza assistance.
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