Agriculture and Tax Reform
Issue Overview
Running a farm or ranch business is challenging under the best of circumstances. Agriculture operates in a world of uncertainty—from unpredictable markets to fluctuating farm business costs, to weather disasters and disease outbreaks. Farmers and ranchers need a tax code that provides certainty and recognizes their unique financial challenges as they work to provide a secure food supply for our nation.
While important strides have been made in recent years, such as the One Big Beautiful Bill Act and the 2017 passage of the Tax Cut and Jobs Act, many important tax provisions are set to expire in 2025. Farm Bureau supports renewal of several key provisions and other tax code changes to provide stability and security for America's farm and ranch families.
Farm Bureau Priorities
Farm Bureau believes that farmers and ranchers need a tax code, which provides certainty and recognizes their unique financial challenges as they work to provide a secure food supply for our nation.
- We support the continuation of an unlimited stepped-up basis for farm and ranch businesses.
- Estate taxes should be permanently eliminated.
- The capital gains tax rate should be reduced and assets should be indexed for inflation.
- Capital gains should not be collected at death and there should be an exclusion for agricultural land that remains in production, for transfers of farm business assets between family members, for farmland preservation easements and development rights, and for land taken by eminent domain.
Tax Certainty for Farmers and Ranchers
The One Big Beautiful Bill Act took important steps toward strengthening farm safety net programs and providing long-term certainty for farmers and ranchers navigating rising expenses, volatile markets and weather uncertainty. It also delivers major tax relief and incentives will directly impact farm and ranch families.
Tax benefits of the One Big Beautiful Bill Act include:
Permanency of 2017 Individual Tax Code Provisions
- Expanded tax brackets with lower maximum tax rate
- Increased standard deductions and child tax credits
- Increased thresholds for alternative minimum tax
Qualified Business Income Deduction
- Permanent 20% qualified business income deduction for pass-through entities
Enhanced Business Expensing and Depreciation
- Raises small business expense limits to $2.5 million
- Restores full bonus depreciation for capital investments
Estate Tax Relief
- Permanent $15 million per individual (or $30 million per couple) estate tax exemption
Estate Taxes
Our nation’s estate tax policy can be in direct conflict with the desire to preserve and protect our nation’s family-owned farms and ranches.
We need tax policies that do not punish capital-intensive businesses like farms and ranches, and that do not hinder sons and daughters from following the agricultural legacy of their parents.
The value of family-owned farms and ranches is usually tied to illiquid assets such as land, buildings and equipment. With a majority, 82%, of farm assets in illiquid farm real estate, producers have few options when it comes to generating cash to pay the estate tax. When estate taxes on an agricultural business exceed cash and other liquid assets, surviving family partners may be forced to sell land, buildings or equipment needed to keep their businesses running. This not only can cripple a farm or ranch operation, but also hurts the rural communities and businesses that agriculture supports.
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