July 23, 2014
www.gfb.org
Vol. 32 No. 29
HOUSE PASSES BONUS DEPRECIATION BILL On July 11 the U.S. House passed legislation that makes the 50 percent bonus depreciation permanent and expands the deduction to vines and trees that bear fruit and nuts. The House passed H.R. 4718, which Farm Bureau supported, by a 268-160 vote. Ten of Georgia’s 14 representatives voted for the bill. The bill was introduced by Rep. Patrick Tiberi (ROhio) and had 26 cosponsors, including Georgia Rep. Tom Price (R-6th District). “Short of a larger, more fundamental reform of the entire tax code, few tax policies will likely have as positive an impact on economic growth and job creation than a permanent bonus depreciation deduction for businesses,” Price said in a written statement. “This policy encourages American businesses to invest in their enterprises, grow them, and, as a consequence, create more jobs. It also expands the customer market for those who manufacture and sell the goods businesses need to improve their prospects for future development. Again, opening up opportunities for further growth in the manufacturing sector and the good paying jobs that come with it. Unlike other policies that might be aimed at one sector of the economy or another, this is a solution that doesn’t have Washington picking winners or losers.” Bonus depreciation is one of the 50-plus tax provisions that expired at the end of 2013. The Senate Finance Committee passed a package in April that contains a two-year extension for 2014 and 2015 of all the expiring provisions, including bonus depreciation. That bill, S. 2260, the Expiring Provisions Improvement, Reform, and Efficiency (EXPIRE) Act of 2014, has been blocked from consideration by the full Senate because of a procedural disagreement over amendments. Because farming requires large investments in machinery, equipment and other depreciable capital, farmers and ranchers place great value on tax code provisions that allow them to write off capital expenditures in the year that purchases are made. Tax provisions that accelerate expensing and depreciation allow farmers and ranchers to better manage cash flow, minimize tax liabilities and reduce borrowing. The ability to immediately expense capital purchases also offers the benefit of reducing the record keeping burden associated with the depreciation. The ability to immediately deduct half the cost of a tree or vine when it is planted instead of having to keep track of the cost and then deducting it when the plant produces fruit or nuts is very positive, but several commodities that are also required by current law to wait to depreciate the cost of plantings were not included in the bill including blueberries and cranberries. Farm Bureau is working to get these crops included.