Senate Overrides Presidential Veto To Pass Farm Tax Bill

by Mike Godfrey, Tax-News.com, Washington

26 May 2008

The US Senate voted 82-13 on Thursday to override a presidential veto of the 2008 farm bill, giving American farmers a permanent agriculture disaster assistance trust fund and nearly USD2bn in farm tax relief as part of comprehensive farm legislation.

Senate Finance Committee Chairman Max Baucus (D-Mont.) led the creation and the passage of the disaster assistance program and the bill’s tax and trade title, as well as the successful effort to fully pay for the bill’s USD10bn in new spending over the next ten years. The bill’s farm tax relief is also fully funded with nearly USD2bn in strong farm tax reforms.

Baucus, a Montana Democrat, commented that: “When the sun sets on farm country tonight, hard-working folks can know that this Congress believes in America’s agricultural sector. By voting to override the President’s veto, we did what’s right for farm families in Montana and across the country today."

He added: “Farm life will never be easy, but the disaster assistance and tax relief in this new law will help American ag producers shoulder the load of providing food and fuel to the world. Strong reforms make the farm bill fairer and require everyone to do their share. I’m proud to stand up for Montana and for all of America to support this farm bill.”

The farm tax reforms in the Act will modify the ethanol credit used by farmers, prevent the use of farm losses as tax shelters, allow farmers to pay additional self-employment taxes to qualify for social security, increase farmers' tax reporting obligations, extend the tariff on ethanol, eliminate certain refunds of duty imposed on ethanol, and exclude denaturant from alcohol fuels credits.

The tax relief provisions in the Act will improve agricultural bonds, extend Section 1031 tax breaks to the holding of water rights, provide a security tax credit, improve tax treatment of equine livestock, and give temporary assistance to tornado victims in Kansas.

Other tax relief provisions will provide support for conservation programs, establish a deduction for costs involved in protecting endangered species, extend a deduction for conservation easements, set a maximum tax rate of 15% on timber sales by C-Corporations that have held trees for at least 15 years, and establish a new timber conservation bond.

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