The South Dakota Farmers Union is opposed to repeal of the tax provision for cooperatives. President Doug Sombke isn’t happy with the tax reform measure passed last year that replaced that deduction with 199A. He says the original 199 shouldn’t have been messed with.

The replacement of 199 which is 199A has led to the unintended consequence of cooperatives benefitting from farmers selling to them to get a 20 percent deduction leaving privately run elevators out in the cold. Iowa Senator Chuck Grassley says that problem needs to be fixed.

Sombke doesn’t think the Senate will be able to fix the problem as they can’t seem to agree on much of anything.

Sombke says the only way his group will support Section 199A is to see it revised back to the way it was before the tax reform bill was passed which is the original 199. He says anything other than that puts farmers and cooperatives tax position in jeopardy.