A bill that will make it more affordable for ranchers, farmers, and small businesses to purchase necessary equipment, develop operations, and give support to employees has been introduced into legislation by U.S. Senator John Barrasso (R-WY).
The Small Business Growth Act (S. 2609) will reduce tax bills for entrepreneurs looking to purchase supplies and equipment, such as farm equipment, tools, furniture, machinery, commercial vehicles and more. This legislation is intended to free up resources so the can be reallocated toward employee salaries, business materials, and other expenditures critical for successful business operations.
“Small businesses are the backbone of Wyoming’s economy. We want to make sure they have every opportunity to succeed,” said Senator Barrasso. “Right now, they face an uphill battle with record high inflation and a mountain of new regulations. The Small Business Growth Act will go a long way in helping Wyoming’s farmers, ranchers and small businesses expand their operations, better compete and hire more workers.”
U.S. Senators James Lankford (R-OK), Marcha Blackburn (R-TN), Thom Tillis (R-NC), Mike Braun (R-IN), and James Risch (R-ID) are listed as cosponsors of the bill.
The Small Business Growth Act has received support from numerous agricultural bureaus and associations including the Wyoming Farm Bureau, Wyoming Stock Growers Association, Wyoming Bankers Association, National Cattlemen’s Beef Association, National Federation of Independent Business, Small Business Association, National Association of Manufacturers, American Farm Bureau, Small Business Investor Alliance, and many more.
Wyoming Farm Bureau Executive Vice President, Ken Hamilton said, “The Wyoming Farm Bureau Federation appreciates Senator Barrasso’s commitment to helping ease the tax burden on the agriculture industry in Wyoming and across the nation.”
“It’s important to help maintain the profitability in agriculture to ensure Americans continue to benefit from abundant food. The provision to expand Section 179 of the US Tax Code would allow farmers and ranchers, and all small businesses, to write off the cost of equipment and machinery with a larger threshold for greater deductibility. In times of high inflation and other input challenges, it’s measures like these that help our nation’s farm and ranch families remain financially viable into the future,” said Hamilton.
The Wyoming Stock Growers Association Executive Vice President, Jim Magagna, also commended Senator Barrasso for recognizing the need for this type of legislation. “The Wyoming Stock Growers Association commends Senator Barrasso for recognizing the value of the Sec. 179 exemption in enabling agricultural producers to make investments that are critical to the continued viability of their operations,” said Magagna. “Passage of the Small Business Growth Act will encourage the engagement of the next generation in Wyoming farming and ranching.”
Kevin Kuhlman, Vice President of Federal Government Relations, National Federation of Independent Business also commended the Senator for introducing the Small Business Growth Act to congress. “NFIB appreciates Senator Barrasso’s leadership in introducing the Small Business Growth Act, which would increase the thresholds and phaseouts for Section 179 small business expensing,” said Kuhlman.
“Section 179 small business expensing is a true small business tax incentive, encouraging small businesses to invest and grow by deducting the full cost of qualifying purchased, leased, or financed products and services. NFIB looks forward to working with Senator Barrasso on this and other important small business tax provisions,” Kuhlman said.
Current laws of the Internal Revenue Code only allow small businesses and agricultural producers the ability to deduct the full purchase price of qualifying equipment or specific depreciable business expenses. Due to the 2017 Tax Cuts and Jobs Act knowns as TCJA, the cap for deductions was lifted to $1 million from $500,000. That cap increase has helped small businesses with getting necessary equipment to expand business operations.
The proposed legislation will piggyback on the current success of TCJA by lifting the cap for deductions to $2.5 million with a phaseout threshold of $4.5 million.
This bill will also ensure more taxpayers can utilize full and immediate expensing while Congress seeks to reverse the phaseout and expiration of Section 168(k), one of the most powerful provisions in the TCJA.
Due to the uncertainty of Section 168(k), it is crucial to keep the cost of capital low for Americans and our nation’s ranchers and farmers.
The full legislation is available to review here.