Tax extenders bill hung up in Senate

By American Farm Bureau Federation

Senators continue to haggle over amendments to the House passed American Jobs and Closing Tax Loopholes Act (H.R. 4213), which would extend a number of expired tax credits and provide disaster aid to farmers and ranchers. While much of the bill is expected to go unaltered, there is talk of, among other things, amendments to bump up COBRA health insurance assistance to unemployed workers and to prevent payment cuts to doctors under Medicare through 2013, rather than through 2011. Changes like that would significantly drive up the cost of the bill, and turn some key Senate supporters against it. Senate Majority Leader Harry Reid (D-Nev.), hoping to get the bill done quickly, is urging his colleagues to file their amendments soon. Before any amendments are voted on, however, the bill’s potential price tag means the 60 votes needed to even bring it to the floor for debate could be hard to come by.

The farmer- and rancher-supported tax incentives in the House bill are off-set, which reduces the chances that they’ll be taken out of the legislation. Among those incentives is the extension of the $1 per gallon biodiesel credit to the end of the year. The credit, which the measure makes retroactive to the beginning of 2010, expired in December. Industry officials have said the credit’s lapse has caused biodiesel plants to idle across the nation and has led to as many as 20,000 people losing their jobs. The bill would also extend the small agri-biodiesel producer credit of 10 cents per gallon and the $1 per gallon production tax credit for diesel fuel created from biomass.

In a June 1 letter to senators urging them to pass the American Jobs and Closing Tax Loopholes Act, American Farm Bureau Federation President Bob Stallman explained why the biofuel credits are so important. “Clean, renewable, domestic energy is helping agriculture achieve economic growth, create a cleaner environment and shield our economy from unreliable foreign energy sources,” Stallman wrote. “These incentives play a key role in the development and expansion of renewable energy.” Also in the House-passed bill are extensions of the five-year depreciation for farming business ma-

chinery and equipment, the enhanced charitable deduction for donated food and the enhanced tax deduction for donating a conservation easement. Stallman pointed out that it’s not only farmers and ranchers who would benefit from those provisions. “The farm and ranch sector can help stimulate the economy, assist those in need and preserve open space when agricultural producers’ incomes allow them to do more than just cover necessary expenses,” he said.

Other extensions in the measure include the additional standard deduction for state and local real property taxes, the deduction of state and local sales taxes, the above-the-line deduction for qualified tuition and the railroad tax maintenance credit.

The $1.5 billion disaster aid portion of the bill contains assistance for specialty crop producers, livestock, cottonseed, aquaculture and more.

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