Sen. Grassley Notes Congress May Be Close to Section199A Tax Fix

DTN Ag Policy Editor Chris Clayton reported yesterday that, “Congress may be close to an agreement to replace the Section 199A language in the new tax law to curb the advantages for farmers selling products to cooperatives instead of private companies.

“Sen. Charles Grassley, R-Iowa, told reporters on Tuesday he understands a possible fix would essentially give farmer cooperatives similar tax benefits that they had under the old Section 199, the Domestic Production Activities Deduction. That tax break amounted to roughly 9% of a cooperative’s income, up to half the amount of wages paid by the cooperative. The co-ops then passed the benefits of that deduction down to farmer-members.

“‘I think it has reached a point that there isn’t a complete agreement, there’s enough agreement within the Congress that if we can do what we originally intended to do of maintain(ing) the status quo for co-ops, we’re going to go ahead do it even if the co-ops aren’t completely satisfied with what we’re doing,’ Grassley said.”

The DTN article noted that, “Basically the fix would be to reinstate the law was prior to the 2017 tax bill and reestablish the Production Domestic Activities Deduction the way it was over past 12 years.”

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