The proposal released by the majority staff from the Senate Finance Committee follows on the heels of a similar proposal released by the U.S. House Ways and Means Committee in March of 2013. Both proposals would require businesses with more than $10 million in gross receipts to use accrual accounting. Both proposals would affect smaller operations by aggregating related businesses to determine whether the businesses collectively have more than $10 million in gross receipts. If they do, then each related business would be required to use accrual accounting.

According to data provided by K·Coe Isom, this proposal could affect feed yards responsible for 73% of U.S. beef production and dairies producing approximately 30% of the U.S. milk supply.

“This proposal impacts many feed yards, hog farms, dairies, and row crop operations,” said Kuehl. “Agriculture is a capital intensive business. Many companies have more than $10 million in gross receipts but have very thin profit margins or even operate at a loss. Further, family businesses much smaller than $10 million in gross receipts could be impacted since the proposal would group related businesses together.”

http://feedstuffs.com/story-tax-change-impact-crop-livestock-producers-45-105391

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