NCBA spearheaded a letter to U.S. House Ways and Means and U.S. Senate Finance Committee leadership this week urging them to consider the implications that changes to federal tax policy will have on family-owned agricultural businesses. Signed by nearly 330 national, regional and state trade associations, including KLA, the letter sent a strong message to Capitol Hill that when drafting legislation to implement President Biden's “Build Back Better” agenda, it is critical the “American Families Plan” supports family farms and ranches.
“Congress must consider the complex structure of family-owned agricultural businesses that serve as the backbone of rural economies; therefore, understand how changes to long-standing provisions in the tax code could be detrimental to the financial viability of these businesses as they transfer to the next generation,” said NCBA Senior Executive Director of Government Affairs Danielle Beck. “This is not a partisan issue; in fact, it’s an issue that affects every single American. With more than 370 million acres expected to change hands in the next two decades, preserving long-standing provisions in the federal tax code is a win-win situation for producers and consumers alike.”
Some federal tax policy proposals have been accompanied by the promise of purported protections to family-owned businesses. However, those accommodations may not necessarily apply to the diverse complexity of ownership structures across agricultural entities. Therefore, the letter stressed the only way to ensure the future viability of family farms and ranches is to fully preserve critical provisions such as stepped-up basis, like-kind exchanges and the Section 199A small business deduction, and maintain the current estate tax code provisions.