Specialty Crop Tax Incentives

December 17, 2015

Several federal tax provisions of importance to the specialty crop investments are included in the omnibus spending bill expected to be passed on Friday, December 18, 2015. The House passed the tax provision in the omnibus bill today, December 17, 2015, while the Senate will vote on the tax provisions and the omnibus spending bill as one package on Friday.  The tax provision will make Section 179 expensing permanent and extend bonus depreciation until 2020.  In addition, there is a new specialty crop tax provision for fruit trees and vines.  For the first time 50 percent depreciation can be claimed by farmers for any fruit tree or vine that is planted, or grafted to a plant that has already been planted.  Fruit trees and vines which are planted after December 31, 2017 will be permitted 40 percent depreciation in 2018 and 25 percent depreciation in 2019 and the incentive will last until January 1, 2020.  Producers of hard cider will also have their alcohol tax reduced.  Lastly, charitable contributions to agricultural research organizations will be encouraged by new improved tax language. 

To view the tax provisions of the omnibus bill, click here.

To view a section-by-section summary, click here.

To view press releases from the U.S. House Ways and Means Committee and the U.S. Senate Finance Committee, click here and here respectively.


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