The National Milk Producers Federation (NMPF), Western United Dairymen, Idaho Dairymen’s Association and 39 other agricultural groups delivered a letter (PDF, 11 KB) to the House of Representatives on Nov. 18 encouraging lawmakers to restore a tax code provision allowing farms and dairies to write off capital purchases, instead of depreciating them over time.

The provision, known as Section 179, is one of more than 50 expired tax policies the House and Senate are likely to consider for reinstatement during their post-election lame duck session.

The provision allows farmers to write off capital expenditures in the year that purchases are made. The farm groups asked that the maximum amount of annual expensing be restored to $500,000, as it was in 2013. In addition, they asked Congress to reinstate the 50 percent bonus depreciation for the purchase of new capital assets, including farm equipment.

The tax provision encourages dairy operators to invest in their businesses and reduces burdens on farm families facing an already unpredictable industry climate.

“Farming requires significant investments in machinery and equipment,” said NMPF President and CEO Jim Mulhern. “By allowing farmers to immediately write off these purchases on their taxes, Section 179 gives producers an incentive to invest in their businesses while it reduced their record-keeping burden.”

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Western United’s CEO, Michael Marsh, noted, “The renewal of these expired provisions makes sense for our dairy farmers as well as for the economy as a whole as the provisions will stimulate the U.S. economy, spur investment and create jobs right here in America.”

The groups encouraged lawmakers to take up a multi-year tax extenders package, including Section 179, by the end of the year. PD

Update: The Section 179 tax code provision was passed in the House and was sent to the Senate. The Senate is expected to pass the tax extenders bill before the holidays, though some changes may be made before it passes.

—From National Milk Producers Federation and Western United Dairymen news releases