The National Council of Farmer Cooperatives and the National Grain and Feed Association announced a proposal to fix the problems with the Section 199A tax deduction. NCFC President and CEO Chuck Conner says their plan restores a portion of the original Section 199 and repeals the 20-percent gross sales language. He says that brings equality to farmers who sell to both coops and private grain elevators.
He says the 20-percent deduction on gross sales to cooperatives will be replaced with a tax deduction that is 20-percent of taxable income. This is more comparable to the original Section 199 deduction.
Conner says his group and NGFA both want Congress to attach their proposal to funding legislation and act on it quickly.
The new tax provision would be retroactive to January 1 of 2018, which would nullify any significant tax savings farmers believed they would gain selling to grain cooperatives.
