Bill Does Not Restrict the Ability of Farmers and Ranchers to Use Cash Accounting
(Nov. 2, 2017) – Farmers for Tax Fairness, a national coalition of farmers and ranchers, today applauded the U.S. House of Representatives for not restricting the use of cash accounting in H.R. 1, the Tax Cuts and Jobs Act. This tax reform legislation proposes significant changes to the tax code and would limit or eliminate many deductions used by U.S. agriculture.
“Farmers for Tax Fairness is pleased that Chairman Brady understood the importance of cash accounting to agriculture and saw fit to not restrict the ability of farmers and ranchers to use this important tax tool,” said Brian Kuehl, Director of Farmers for Tax Fairness and Director of Federal Affairs for K·Coe Isom. “Because of the high volatility in agriculture – swings in commodity prices and swings in input costs – it is critical that farmers and ranchers be able to use cash accounting to level their cash flow.”
Introduced today, the “Tax Cuts and Jobs Act,” H.R. 1, would reduce the top corporate rate to 20%, reduce individual rates into four brackets, create a new 25% tax rate for pass-through entities, double the standard deduction, provide for increased expensing of capital assets, and phase out the estate tax. At the same time, the bill would remove many deductions used by farmers and ranchers today.
“While we’re obviously concerned about the potential loss of other deductions used by farmers and ranchers, Farmers for Tax Fairness is pleased that Congress appears to understand the importance of cash accounting to our industry,” added Kuehl. “We will continue to track tax reform legislation in the House and Senate to make sure that limitations on the use of cash accounting by agriculture are not inserted into these bills.
About Farmers for Tax Fairness
Farmers for Tax Fairness is an ad hoc coalition of farmers, ranchers and agricultural businesses that are opposed to limitations on the use of cash accounting by agriculture. In 2013, then House Ways and Means Committee Chairman Dave Camp proposed to limit the use of cash accounting by businesses with more than $10 million in gross receipts. Farmers for Tax Fairness organized against this proposal and was pleased when Chairman Camp agreed to exempt farm businesses from this provision when he introduced his tax reform legislation in 2014.
About K·Coe Isom
K·Coe Isom leads, nationally, as consultants and CPAs in the food and agriculture industry—services constituting more than two-thirds of the firm’s business. The firm is embedded throughout the US food-supply chain—from policy to plate—working with producers, input suppliers, processors, packagers, distributors, biofuel manufacturers, equipment dealerships, landowners, lenders, and many agencies and policy organizations that support the industry. The firm provides staff support for the Farmers for Tax Fairness coalition. The firm also has regional strengths in community banking, construction and real estate development, education, manufacturing, and technology. K·Coe Isom serves domestic and international clientele from 21 coast-to-coast offices. Visit kcoe.com.