Buckeye Farm News
Farm Bureau is continuing to push for the long-term extension of Section 179 small business expensing and 50 percent bonus depreciation.
The House Ways and Means Committee recently passed legislation (H.R. 2510) that would make 50 percent bonus depreciation permanent and expand it to include fruit- and nut-bearing plants that have a pre-productive period of two years or more.
In July the Senate Finance Committee approved a two-year extension of 52 tax provisions — including bonus depreciation and Section 179 — that expired at the end of last year. Ohio Congressman Pat Tiberi has been leading the call to make the tax provisions permanent.
•Section 179 small business expensing allows a taxpayer to deduct all of the cost of new or used business property rather than depreciating the cost over a longer period of time. Qualifying property must be used in an active trade or business like farming and ranching. For 2014, the maximum deduction was $500,000 of purchased business property reduced dollar for dollar when investments exceeded $2 million. Unless extended, the deduction for 2015 will be $25,000 with the deduction reduced dollar for dollar when expenditures exceed $800,000.
•Fifty percent bonus depreciation allows a taxpayer to deduct up to half of the cost of new-only business property above what would normally be deductible. Because farming requires large investments in machinery, equipment and other depreciable capital, farmers place great value on tax code provisions that allow them to write off capital expenditures in the year purchases are made. Tax provisions that accelerate expensing and depreciation allow farmers to better manage cash flow, minimize tax liabilities and reduce borrowing.
Farm Bureau members are expressing concerns about black vultures increasingly injuring or killing their animals, particularly livestock. The birds are a federally protected species under the Migratory Bird Treaty Act. Ohio Farm Bureau has been working with Congressman Brad Wenstrup on getting help in finding a better approach for farmers to protect their livestock from black vultures. Those who experience severe depredation (damage or loss caused by the birds) have to apply for an individual migratory bird depredation permit from the U.S. Fish and Wildlife Service, which can be time consuming and require a lot of recordkeeping.
If you are experiencing problems with black vultures, contact your county Farm Bureau to share your story. Farm Bureau needs to collect examples of well documented damage by the birds in order to strengthen its policy goals. Current Ohio Farm Bureau policy calls for farmers who experience black vulture related livestock losses in one year to be allowed to apply for a control permit prior to the next calving and lambing season and recommends Ohio wildlife officers be authorized to issue damage control permits instead of federal fish and game officials in order to expedite the permitting process.
Sequestration, a budget mechanism used to achieve spending reductions, will soon affect farm programs. Agriculture Secretary Tom Vilsack said sequestration will cut payments under the Price Loss Coverage and Agriculture Risk Coverage programs for 2014 through 2016 by 6.8 percent. Sequestration, which Congress instituted in the Budget Control Act of 2011, will affect the programs regardless of when farmers signed up for them.