“Thompson, Radanovich introduce bill for farming stimulus"
Washington, Jun 13 -
Last week Congressmen Mike Thompson (D-CA) George Radanovich (R-CA) introduced bipartisan legislation to extend small business stimulus provisions to farmers that plant orchards and vineyards.
The American Recovery and Reinvestment Act included a provision to help businesses quickly recover the cost of new capital investment, including property used for farming.
Unfortunately, the final bill did not include permanent crops like trees and vines as a type of investment that qualifies for the tax break because they don’t harvest within the first year. Thompson and Radanovich’s bill would make sure vine and tree farmers get the same benefits as other farmers.
“Tree and vine farms provides tens of thousands of jobs in California, and like other types of American farms already included in the stimulus bill, they are struggling in this tough economy,” said Congressman Thompson, co-founder of the Congressional Wine Caucus. “It’s only fair that farmers who plant long-term crops like grapes have the chance to do their part in turning our economy around. By extending this tax break to include trees and vines, we’ll give them that chance.”
“Americans rely on safe and affordable fruits and nuts that are grown domestically for a balanced diet,” said Congressman Radanovich. “Tree crop production is a major contributor to jobs and the economy in California’s Central Valley. This tax break would provide equity for tree crop producers and a strong incentive to invest in their business, which will help jumpstart California’s struggling economy.”
Under the terms of the American Recovery and Reinvestment Act, property acquired and “placed in service” in 2009 is eligible for 50 percent “bonus” depreciation in 2009. Unfortunately, permanent crops such as trees and vines producing fruits, nuts or other crops which are planted in 2009 are not considered “placed in service” until the harvest of their first commercially harvestable crop.
In most cases, it takes significantly longer than a year before these permanent crops produce their first commercially harvestable crop and, therefore, these crops (even though planted in 2009) are not eligible for bonus depreciation.
In order to encourage farm investment, Thompson and Radanovich’s bill would change – for the purpose of bonus depreciation – the “placed in service” date for permanent crops to the date on which the crop is planted. This will place farmers on equal footing with others eligible for bonus depreciation.