In a sign of how legislators from farm states may try to influence the proposed rewrite of tax law, senators on Friday introduced a bill to help farmers more quickly depreciate farm equipment.
Senate Agriculture Committee Chairman Pat Roberts, R-Kan., on Friday joined Sens. Amy Klobuchar, D-Minn., and Jon Tester, D-Mont., to introduce the Agriculture Equipment and Machinery Depreciation Act to help farmers purchase new equipment and replace worn-out machinery by amending the U.S. tax code to permanently set a five-year depreciation schedule for certain agricultural equipment.
The current tax code sets a seven-year depreciation cost recovery period for agricultural equipment.
“This commonsense legislation will give farmers and ranchers the certainty they need to invest in new, more modern equipment so they can create more jobs and growth in our communities,” Roberts said in a news release. “A five-year depreciation schedule allows for predictability and fairness in our overly complex tax code, giving the agriculture community the ability to produce more efficiently and at a lower cost.”
“Making the tax code more consistent with how farmers finance new equipment will allow them to write off equipment costs sooner and put money back in their pockets. In turn, they will be better able to create jobs and boost our economy,” Klobuchar said.
“With commodity prices down across the board, it is critical that our tax code is up to date and reflects the needs of hard-working farmers and ranchers,” Tester added.
The senators said that the recovery period for the deduction should match the useful life and financing of that property, but that surveys from the USDA’s Farm Service Agency show that, on average, farmers and ranchers finance farm equipment and machinery for five years rather than the seven years under the current law.