The wet weather we’re supposed to see this weekend won’t help farmers, nor will recent news regarding a new tax law that impacts their ability to depreciate equipment.
FARMERS LOSING THOUSANDS OF DOLLARS UNDER NEW LAW
We recently learned that farmers are now on the hook for a bad tax law that was approved by House Democrats and signed into law by Governor Walz last session.
Specifically, farmers and other business owners who traded equipment are having that trade value counted as income and can likely expect a bill from the Department of Revenue, and it’s already cost one farmer $10,000.
The tax problems center on the failure to fully conform to Section 179 – accelerated depreciation – in the federal tax code. Under last session’s law, the Department of Revenue is directed to review Section 179 claims, adjust for new expensing limits, and review any gains or losses from the equipment they traded in.
For a farmer or business owner who traded in farm equipment or other machinery in 2018, and realized a financial gain on that equipment, the Department of Revenue will send a letter to them stating income taxes will now be owed on that gain immediately, while the higher expensing limits will only benefit them over time.
Last session the GOP-controlled House did pass full conformity to Section 179 (which would have avoided this current problem), but former Governor Dayton vetoed that comprehensive tax bill.
House Republicans have already pledged to find a solution to this problem, and we are working on legislation to fully fund conformity to Section 179 and will cancel any penalties and interest leveled by the revenue department on unpaid debts due to the Section 179 debacle.
LOCAL COMMUNITIES TO RECEIVE DISASTER RELIEF FUNDS
On Thursday, I learned that Governor Walz has authorized the use of Minnesota’s Disaster Assistance Contingency Account funding for damage caused by severe winds, rainfall, and flooding in mid-July. The City of Hammond and Greenfield Township, both in Wabasha County, were among those that sustained damage, and more than $61,000 will now be allocated to help pay for relief efforts in these areas.
The legislature created the Disaster Assistance Contingency Account in order to avoid calling special sessions to allocate any needed disaster funding. I’m pleased communities across Minnesota are now receiving the aid they need.
NATIONAL MANUFACTURING MONTH BEING CELEBRATED IN RED WING
The Red Wing Area Chamber of Commerce is currently celebrating National Manufacturing Month. There will be several events throughout October including the Annual Manufacturing Appreciation Luncheon, the 12th Annual Business Expo, multiple factory tours, educational seminars and even Trivia Night! Take advantage of this opportunity to see, tour and learn about the importance of manufacturers in our local area! To learn more, click here.
STAYING IN TOUCH
As always, if you have questions or concerns regarding any issue, please contact me. You can reach me at email@example.com or 651-296-8635.