HR2419-Equipment Depreciation-Farm, Nutrition & Bioenergy Act of 2007

NAEDA, our affiliate associations and other trade industry organizations have been lobbying both the House and the Senate for sponsorship of legislation that would change IRS rules related to depreciation of farm and ranch equipment and machinery. Your support and letters are now needed more than ever.

The Senate, in passage of their version of the 2007 farm bill, has included language that would make this depreciation change. It is important now for you to contact both your senators and representatives and ask that they support this language change as the farm bill moves to conference committee in January. All you have to do is complete the required fields below and click “send” and a letter will be sent on your behalf to your representative.

Passage of this legislation is important to all dealers and it is a top priority in this session of Congress for NAEDA.

Subject:

Dear [ Decision Maker ],

(Edit Letter Below)

I am writing to bring to your attention to a very important provision in the Senate-passed version of the farm bill, H.R. 2419, the Farm, Nutrition and Bioenergy Act of 2007. Included in the farm bill's tax title is a temporary provision to reduce the depreciation recovery period for equipment and machinery used in the business of agriculture. We urge your support for retaining this provision in the final conference agreement on the farm bill.

Currently, the IRS requires farm machinery and equipment costs must be recovered over seven years. The bill's provision would reduce the recovery period for farming machinery and equipment to five years for property placed in service after the date of enactment and before January 1, 2010. The provision was scored at costing $1.477 billion over five years, but is estimated to have a negligible revenue effect over 10 years.

Over the past two decades, agriculture equipment has undergone a significant transition from low technology to high technology to adjust to changing environmental concerns and the need to improve U.S. farm productivity. Today's state-of-the-art equipment includes precision farming tools that endure thousands of hours of intense usage. Shortening the recovery period to five years would better align the depreciation of agriculture equipment and machinery to the time over which most farming equipment purchases are financed (e.g., three to five years) and reflect the actual useful life of today's farming and ranching equipment.

In addition, American Farm Bureau Federation economists have estimated this change would increase farm and ranch income by $800 million in a typical year, thereby improving cash flow and helping farmers and ranchers replace worn-out or inefficient equipment with newer environmentally friendly units.

Please contact Ways and Means Committee Chairman Charles Rangel and House Agriculture Committee Chairman Collin Peterson to let them know you support including this important provision in the final conference agreement on the farm bill.

Thank you very much for your support.

Sincerely,
[Your name]
[Your address]

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