Two major tax incentives supported by farmers, farm groups and agricultural implement dealers likely be will approved by Congress, Sen. John Hoeven, R-N.D., told Agweek late Tuesday.
“These are really important tax relief,” he said of the incentives.
Senate and House negotiators have finished work on the new tax bill, which includes provisions on Section 179 and so-called bonus depreciation, Hoeven said.
The House could vote to approve the bill on Thursday, after which it would come to the Senate for approval, Hoeven said.
“We’d hope to have it passed by Thursday night,” he said.
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Section 179 of the U.S. Internal Revenue Code had allowed farmers and other businesspeople to deduct up to $500,000 of new or used equipment purchased during the tax year. As things stood, however, the maximum for the 2015 tax year was limited to $25,000.
Hoeven said previously that he was optimistic the higher limitation would be restored, but he was uncertain whether the change would be permanent or just for two years.
“We really pushed for the permanent fix to Section 179,” he said Tuesday.
The bonus deduction will be extended for five years, not made permanent, Hoeven said.
Normally, the Section 179 deduction is spread over many years. But bonus depreciation allows half of the deduction in the first year, increasing first-year tax savings and providing even more incentive to buy equipment.
Farmers and ag groups had pushed to restore the $500,000 limitation and bonus depreciation. There had been speculation that Congress would act on the incentives- which are supported by business groups outside agriculture, as well - late this year.
