Senate passes bill to allow ranchers, farmers to expense equipment purchased in 2014

WASHINGTON -- A bill that would allow farmers, ranchers and other small businesses to expense equipment to run their operations is on its way to President Barack Obama's desk.

WASHINGTON -- A bill that would allow farmers, ranchers and other small businesses to expense equipment to run their operations is on its way to President Barack Obama's desk.

The Senate passed the one-year Tax Increase Prevention Act 76-16 Tuesday night. The measure extends Section 179, meaning small businesses, including ranchers and farmers, may expense purchases made in 2014.

"These extensions, and especially the Section 179 expensing and depreciation provision, will provide immediate tax relief and greater certainty to individuals, farmers, ranchers and small businesses for the current tax year," Sen. John Hoeven, R-N.D., said Tuesday evening. "That makes more cash available to reinvest in the business, which is good not only for small businesses, but also for the economy because it helps businesses grow and hire."

Section 179 allows expensing and depreciation expense for purchase and repairs up to $500,000 of acquired business property.

Hoeven and Sen. Heidi Heitkamp, D-N.D., both have been pushing the Senate to pass a permanent bill. President Barack Obama threatened to veto the bill, resulting in a temporary one-year extension, Hoeven said.


"That means we are going to have to work on it next year, but it's important that we get it in place now for '14," Hoeven said. "Otherwise, our small businesses and our farmers would see, in effect, higher taxes because they wouldn't be able to expense repairs and the amount they could depreciate would go down.

In a floor speech before passage, Senate Finance Committee Chairman Ron Wyden said: "With this tax bill, the Congress is turning in its tax homework 11 months late ... this package of tax incentives will last just two weeks before families and businesses are thrown back into the dark with respect to the taxes they owe. The legislation accomplishes nothing for 2015."

In calling on Congress to provide greater certainty for taxpayers next year, Wyden added, "The Congress is about to pass a tax bill that doesn't have the shelf life of a carton of eggs."

The bill was projected to cost U.S. taxpayers $41.6 billion over 10 years. No new federal revenue sources were dedicated to fully offsetting that cost, which means it would increase the federal budget deficit.

Not passing a bill for 2014 would not only hurt farmers and ranchers but implement dealers, Hoeven said.

"It is going to cut sales of farm equipment drastically if the farmers don't get a tax incentive to purchase equipment," Dennis Miller, owner of Southwest Ag Repair Inc. in Dickinson, said in a statement Tuesday. "The loss of sales will create backlash in the economy throughout the state and the country. There has to be better ways to create the tax revenue."

Heitkamp said in a statement that the Senate needs to come together to find permanent solutions for communities, adding they "count on us to get this job done."

"In North Dakota, we have to plan ahead -- we plan for our harvests, for our winters, and for our children's futures," Heitkamp said. "We have to seek practical, lasting solutions that really work, because nail-biting and foot-dragging is no way to legislate -- it's not the way businesses run, it's not the way families work, and it's not the way this country should operate."


Hoeven said in a news release early Tuesday that he was prepared to speak on the bill throughout the week until a vote, which was expected to take place on Monday. Obama was expected to sign the one-year bill.

Hoeven said he will work to make the extensions permanent in the new Congress, which will have a Republican majority in January.

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