In this week’s National Cattlemen’s Beef Association (NCBA) Newsletter they discuss the tax extenders package that is still a possibility for lame-duck session.

As we wait to see what the lame-duck congressional session holds for cattle producers, the conversation surrounding tax continues to evolve. While momentum has slowed for a comprehensive tax reform, a tax extenders package is still a possibility by the end of 2014. The House passed their tax extenders package yesterday; it is expected the Senate will follow with their vote next week.

“Despite all the partisan wrangling we see in Washington,” Senator Orrin Hatch (R-UT) stated, “there seems to be bipartisan agreement on at least two salient points: tax reform is necessary; and tax reform is going to very, very difficult.”

The Senator said that while they were on the cusp of a deal on tax extenders that had bipartisan support, the President’s threat to veto has put Congress in a situation that will likely only allow them to pass a one-year retroactive extension of all tax extenders.

Kent Bacus, director of legislative affairs for NCBA, said the extension of Section 179, a provision that provides a higher deduction level for some capital expenditures, like machinery and equipment, and the extension of bonus depreciation are key for producers.

“Last year producers were able to expense up to$500,000 on capital investments, but this year that was lowered to $25,000,” said Bacus. “For large equipment purchases, cattle producers need certainty in order to properly plan for their business.”

Unfortunately, the retroactive extension means producers will be operating under an expired tax code in 2015, but it could add the needed pressure to complete a comprehensive tax reform deal in the New Year.