Nearly 270 farm groups, agribusiness associations, and farmer cooperatives are calling on Congress to permanently extend the expiring provisions of Section 199A as lawmakers advance the federal budget process.
In a joint letter to Congress, the coalition emphasized the critical role Section 199A plays in maintaining the competitiveness of farmer co-ops and their members against corporations that benefited from the permanently reduced corporate tax rate under the 2017 Tax Cuts and Jobs Act.
“Section 199A has been instrumental in ensuring that farmer cooperatives and their members can compete on a level playing field. Each year, co-ops pass approximately 95% of the benefit—more than $2 billion—directly back to farmers across rural America,” the letter states. “This deduction has driven job creation, economic growth, and rural investment. It has provided vital support to producers as they navigate unprecedented challenges, including a pandemic, global instability, extended periods of low commodity prices, and the highest inflation in a generation.”
Without congressional action, Section 199A—along with many other provisions of the 2017 Tax Cuts and Jobs Act affecting farmers—will expire at the end of 2025. The expiration would result in a significantly higher tax burden for farmers and ranchers nationwide. Making Section 199A permanent is essential to providing cooperatives and their members with financial certainty in an increasingly unpredictable economic environment.
For a copy of the letter, click here.
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