A fix to the new tax law that would equalize the tax treatment of grain sales to agricultural cooperatives and other suppliers could be included in a spending bill that Congress must pass before March 23.
“What was passed in the law, I think everyone agrees, was a last-minute change that didn’t balance the competing players in the marketplace fairly, and we intend to do that sooner rather than later,” House Ways and Means Committee Chair Kevin Brady, R-Texas, told reporters February 26. He added, however, that he had yet to discuss with Senate Finance Committee Chair Orrin G. Hatch, R-Utah, the best way to move the fix forward.
Brady said it’s likely the legislative fix will be considered when lawmakers negotiate the omnibus spending package, which they hope to pass before the government runs out of funding on March 23.
The new law gives a larger tax benefit to farmers who sell to cooperative grain suppliers than to other companies under the section 199A passthrough business income deduction. The provision was added to the Tax Cuts and Jobs Act (P.L. 115-97) just before Republicans passed it in December 2017.
A group of House Republicans sent a letter February 21 urging Republican congressional leadership to address the tax disparity, arguing that a remedy would “restore the competitive marketplace for agricultural producers.” Hatch and Brady, along with Treasury Secretary Steven Mnuchin, have expressed support for a fix.
Follow Dylan Moroses (@DMoroses3244) on Twitter for real-time updates.