Lawmakers Bring Back Bill to Accelerate Depreciation

Sens. Pat Roberts (R-Kan.), Amy Klobuchar (D-Minn.) and Jon Tester (D-Mont.) recently introduced the Agriculture Equipment and Machinery Depreciation Act (S. 1422) to help farmers purchase new equipment and replace worn-out machinery.

Klobuchar introduced the same legislation in 2015.

The bill would amend the U.S. tax code to permanently set a five-year depreciation schedule for certain farm equipment. The current tax code sets a seven-year depreciation cost recovery period for the equipment.

Changing the depreciation schedule to five years would make the tax code more consistent and support rural development by aligning the length of time that farmers can take a depreciation deduction with the average life of the equipment.

According to surveys from the USDA’s Farm Service Agency, on average, farmers and ranchers finance farm equipment and machinery for five years.

Source: Southeast Farm Press