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Pelosi Open to Pursuing ‘Grain Glitch’ Fix

Posted on March 16, 2018 by Asha Glover

Democrats are willing to talk about fixing language in the tax law that mistakenly gives a competitive advantage to farmers who sell to nonprofit grain suppliers, according to House Minority Leader Nancy Pelosi, D-Calif.

“Our interest is to help the American people . . . so we were open to a bipartisan conversation about that,” Pelosi told reporters March 15.

House and Senate lawmakers announced a deal March 13 to fix the so-called grain glitch — language included in the Tax Cuts and Jobs Act (P.L. 115-97) that gives a larger tax benefit to farmers who sell to cooperative grain suppliers. 

The proposed agreement would allow cooperatives to determine their section 199Adeductions based on rules substantially similar to those that were in the prior section 199, including keeping the flexibility to retain part of the deduction to offset income at the entity level or pass through part or all the deduction to their “farmer patrons.”

Rep. Steve King, R-Iowa, also has a proposal to correct section 199A, which as he explained in a letter to House Ways and Means Committee Chair Kevin Brady, R-Texas, “would bring both co-ops and private grain elevators together so there is an equal incentive for farmers.”

Senate Finance Committee member Pat Roberts, R-Kan., reacted positively to Pelosi’s comments, saying support for the grain glitch fix “shouldn’t be political.” He told Tax Analysts that a Senate decision whether to add it to the omnibus spending bill lies with Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Charles E. Schumer, D-N.Y.

However, Pelosi also said that Democrats will not be open to every change Republicans may want to make to the law. “Depends on what it is,” she said. “In other words, they made some mistakes there, but they’re also now talking about having another tax bill.”

Both President Trump and Brady have mentioned the possibility in recent days of a second major tax bill, but have not offered specific details on what would be included. Brady said the bill would be separate from a technical corrections package.

Stephen K. Cooper contributed to this article.

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