The NCC joined onto a letter with 11 other agricultural and commodity organizations to Senators urging them to co-sponsor S.700, which was introduced by Sens. Stabenow, D-Mich.; Roberts, R-Kan.; Moran, R-Kan.; and Klobuchar, D-Minn. S.700 would amend the tax code to permanently establish a five-year depreciation schedule for agricultural equipment placed in service after Dec. 31, 2009. The letter can be viewed at the NCC’s home page, www.cotton.org.
Current tax law sets a seven-year depreciation schedule for agricultural equipment but construction equipment – which is similar in use and life span to farming equipment – is provided a five-year depreciation schedule. Accelerating the depreciation schedule for agricultural equipment to five years would better align depreciation and debt service which would increase farm income by an estimated $850 million per year.
“This bipartisan effort will strengthen American manufacturing and American agriculture,” Sen. Stabenow said. “As chairwoman of the Senate Agriculture Committee, I’m committed to streamlining and simplifying our nation’s farm policies and finding ways to make existing programs work better. This legislation will encourage farmers and agricultural producers to continue investing in their businesses, creating jobs and strengthening the economy.”
Sen. Moran stated, “Common sense dictates that depreciation schedules should match the typical length of debt service for farm machinery. By reforming the tax code, we will better align the code with the realities of agribusiness and support our nation’s farmers and ranchers, who are critical to the success of our economy.”
Sen. Roberts, who is the Agriculture Committee’s ranking member, added that, “Providing certainty in the tax code by making agriculture equipment eligible for a five-year depreciation schedule makes sense and will go a long way in helping America’s farmers and ranchers invest in their businesses and communities.”
The United States is the world leader in the production of agricultural equipment, with the industry directly and indirectly employing 250,000 workers.