Tax Help for Ranchers Suffering
from Drought Conditions
Washington, D.C. (May 13, 2004) - In
passing the Jumpstart Our Business Strength (JOBS) Act this week,
the Senate has approved important tax cuts for U.S. cattle producers
suffering from drought conditions. Finance Committee Chairman Sen.
Chuck Grassley (R-Iowa) and Sen. Max Baucus (D-Mont.) won full support
with a 92 to 5 vote in the Senate. The legislation includes a provision
which allows for the extended deferral of capital gains tax from drought-related
sales of livestock, previously referred to as the "Rancher Help
Act."
"We are extremely pleased that the Senate has passed this tax
change for cattle producers," says Jay Truitt, NCBA executive
director of Legislative Affairs. "Many of our members across
the country have been suffering through drought conditions for years,
and are in dire need of changes in these current tax burdens."
NCBA has worked with members of Congress for many years to push for
the passage of such legislation, requesting changes to the tax code
to enhance the business climate for cattlemen. Under current tax laws,
ranchers forced to reduce their herds due to historically-dry grazing
lands are exempt from paying capital gains tax if they replace their
herds within two years.
"The current law just isn't working for today's ranchers, with
certain regions seeing drought conditions year after year," says
Truitt. "There seems to be no relief in sight, and the added
tax burden is crippling. The changes this legislation makes to tax
law will be a dramatic improvement for those trying to save their
livelihood during long-term, unexpected, and irreversible drought
conditions."
Another provision in the bill would give tax credits to cattle producers
who produce electricity from renewable resources like livestock waste
nutrients. The credit is 1.8 cents per kilowatt hour of electricity
produced. This gives an opportunity for producers to turn bottom line
expenses into a profit. Anaerobic digesters and other types of technology
have been used to create electricity.
"We urge members of the House to include these important provisions
in the House version of the tax bill, or to ensure that the Senate
provisions are kept in conference," says Truitt.
NCBA will continue to push for final passage of these importance tax
code changes for producers.
