Farm Bureau supports tax policies that incentivize the expansion of markets for agricultural commodities and encourage rural infrastructure improvements, the American Farm Bureau Federation said a statement to the House Ways and Means Select Revenue Measures Subcommittee. The organization urged lawmakers to extend now-expired tax provisions for biodiesel and short line railroads.
Farm Bureau also called on Congress to formulate predictable, stable, long-term tax policies that provide businesses and investors the certainty they need for sound business planning.
“The uncertainty surrounding the expired biodiesel tax credits and the tax credits for short line railroads undermines the purpose of these credits, which is to provide incentives for investment and to promote economic growth. It is critical that Congress provide certainty for and the extension of these important tax incentives,” Farm Bureau said.
Biodiesel is a cleaner-burning renewable replacement for petroleum diesel fuel. Made from either vegetable oils or rendered animal fat, it benefits both crop farmers and the livestock industry. In addition, biodiesel and biofuel production facilities are a driving force in local economies by providing employment opportunities and broadening the local tax base.
Biodiesel is also a win for those well outside of agriculture and rural America.
“All citizens, including farmers who are large fuel consumers, benefit when our nation reduces its dependence on volatile international oil markets,” Farm Bureau pointed out.
The Bipartisan Budget Act of 2018 retroactively extended the biodiesel tax credit for 2017. Farm Bureau is calling for the reinstatement of tax credits for biodiesel, renewable biodiesel and second-generation biofuels.
Short line railroads are first- and last-mile carriers that connect small towns, farms and factories to the national rail network, creating jobs and stimulating economic growth in thousands of local communities.
“Farmers and ranchers need efficient and cost-effective rail transportation for the delivery of equipment, seed, fertilizer and other inputs and to move the food, fiber and fuel products they produce to market. An efficient rail system reduces the prices farmers pay for supplies and greatly expands domestic market access and access to ports for export to foreign markets,” Farm Bureau said.
The short line rail tax credit, which provides a 50 percent tax credit for infrastructure repairs and upgrades made by regional and short line railroads, was first enacted in 2005. It has been extended five times and expired in 2017. Farm Bureau is asking Congress to make the credit permanent.
In its statement, Farm Bureau emphasized that the biodiesel and short line railroad credits are not the only tax provisions important to farmers and ranchers.
Other critical tax provisions include a number of those found in the Tax Cuts and Jobs Act, such as reduced individual tax rates, the new Sec. 199A business income deduction, immediate deductibility of business expenses, the doubled estate tax exemption and the increased Alternative Minimum Tax thresholds—all of which are temporary.