Today, the U.S. House of Representatives voted 258 to 160 to pass H.R. 4718, legislation that will make permanent the fifty percent bonus depreciation of new capital purchases that was created in the American Taxpayer Relief Act of 2012. This bill addresses a section of the tax code that expired at the end of 2013 and is one of the provisions that has traditionally been addressed in tax extenders packages. It was also considered as part of the tax reform proposals in the House and Senate.
“NCBA strongly supports the permanent extension of fifty percent bonus depreciation because it will help provide farmers and ranchers with predictable pro-growth tax code that allows us to make long-term investments in our businesses,” said Bob McCan, NCBA president and Victoria, Texas, cattleman.“Bonus depreciation coupled with Section 179 expensing are effective tools allowing farmers and ranchers to make the necessary investments needed to remain competitive in the global market place and create jobs in America.”
Bonus depreciation allows businesses that purchase new equipment to depreciate 50 percent of the cost in the first year, plus the percentage of the remaining basis in the equipment that would ordinarily be depreciable under the Modified Accelerated Cost Recovery System.
The House Ways and Means Committee approved the measure in May as part of the piece-meal approach to approving individual parts of the tax extenders package that expired at the end of 2013.
Earlier this spring, the Senate Finance Committee passed a bill extending nearly all of the extenders for two years. Previous action on the Senate floor was suspended and it is likely that the Senate will not take up the tax extenders package until after the elections in November.
“NCBA will continue to be actively engaged in the tax extenders process to help provide greater certainty in the tax code for America’s ranching families,” said McCan.