Permanent 5-Year Property Depreciation Bill Introduced

Sen. Amy Klobuchar (D-MN) has introduced Bill S.700, a bill that would amend the IRS Code of 1986 to permanently extend the treatment of certain farming business machinery and equipment as five-year property for purposes of depreciation. The bill has now been referred to Senate committee for further discussion.

Allowing farmers and ranchers to write off or depreciate equipment over a shorter five-year lifetime, versus seven years, will increase their income, help in debt repayments and allow for the timely replacement of equipment, which helps to drive our industry.

IRS changes regarding how buildings and contents are depreciated should better reflect modern day practices in our industry. Current depreciation schedules spread the costs of improvements over too long of a recovery period, which often delays such investments.

In addition, faster equipment replacement brings environmental benefits from newer engines, better fuel efficiencies and the latest technology in emission controls.

The North American Equipment Dealers Association (NAEDA) is a leading force in calling for these changes to be made permanent, saying for many dealers, it would encourage capital expansion plans, provide space to accommodate newer and larger equipment and help local economies with additional construction and service jobs. ◆