Bloomberg writers Mario Parker and Sahil Kapur reported yesterday that, “A provision in last month’s U.S. tax overhaul that gives farmers the opportunity to significantly minimize their taxable income is drawing fire from some companies who could lose out as a result, while two Senators behind the change pledged to fix the problem.
“The measure in question gives farmers a bigger deduction if they sell crops to agricultural co-operatives. That appears to be a win for farmer-owned agribusinesses such as CHS Inc. at the expense of other major crop buyers like Archer Daniels Midland Co., Bunge Ltd. and Cargill Inc.
“The two Republican senators who worked to craft that part of the bill, Senator John Hoeven of North Dakota and John Thune of South Dakota, say they were trying to preserve a provision from the outgoing tax code, and that the outcome for co-ops was unintentional. They’re now working with other lawmakers and the agriculture industry to find a ‘reasonable solution,’ Ryan Wrasse, a spokesman for Thune, said in an emailed statement Wednesday.”
The Bloomberg writers noted that, “‘Senator Thune believes that producers should make decisions about where and how to sell their products without the tax code unfairly tipping the scales in favor of marketing to one type of business entity or another,’ Wrasse said.
“‘Right now in terms of the technical fixes, this is the one that probably needs to get fixed the most,’ Thune told reporters in Washington on Thursday, referring to the tax bill.”
