Sending Office: Young (IA), David
Sent By:
Stephanie.Carlson@mail.house.gov

 

Request for Signature(s)

Current cosigners: Reps. Yoder, Messer, Lucas, Moolenaar, Sam Graves, Buschon, Emmer, Rouzer, Rodney Davis, LaHood, Blum, Kinzinger, Noem, Bacon, Bost, Luetkemeyer, Cramer, Marshall, Estes, Shimkus, Gianforte

Deadline for signatures is COB Thursday, February 15. Please contact Stephanie.Carlson@mail.house.gov or call 202.225.5476 to sign on or if you have any questions. The text of the letter is below.

Fix Section 199A

Like many of you, we’ve heard from our constituents that the Tax Cuts and Jobs Act (TCJA) is providing tax relief for many Americans and strengthening our economy through wage increases, bonuses and business investments. However, we’ve heard concerns from
many in the agriculture industry regarding the unintentional tax advantage and market uncertainty created by the new Section 199A provision. With the potential to reduce competition, this will directly harm small and independent business and increase consolidation
in the agriculture industry.

Prior to TCJA, Section 199 of the tax code allowed certain businesses, including farmer cooperatives, a tax deduction for “qualified production activities” and the intent was to ensure farmer cooperatives would receive comparable treatment under the new
law. Unfortunately, while Section 199 was eliminated by TCJA, Section 199A goes too far and has resulted in a dramatic competitive imbalance impacting numerous independent and privately organized value chain stakeholders including grain handlers, feed mills,
seed companies, ag retailers, biofuels producers, banks, livestock marketers, and dairy processors. The remedy should retroactively restore the competitive landscape of the marketplace for producers and replicate the tax benefits accorded to cooperatives under
Section 199 prior to Section 199A. Left unchecked, Section 199A’s uncompetitive impacts will ripple across into other industries.

Sincerely,

David Young (IA-03)

The Honorable Paul D. Ryan

Speaker

U.S. House of Representatives

H-232 The Capitol

Washington, D.C. 20515

 

Dear Speaker Ryan:

Thank you for your dedication and leadership to provide tax relief for Americans and strengthen our economy. We’re pleased to see many Americans benefitting from the Tax Cuts and Jobs Act (TCJA) through wage increases, bonuses, and business investments.
However, like you, we’ve heard from many constituents in the agriculture industry with concerns regarding the unintentional inequity created by Section 199A. While not intended, this Senate sponsored provision has resulted in a dramatic competitive imbalance
impacting numerous agricultural value chain stakeholders including grain handlers, feed mills, seed companies, ag retailers, biofuels producers, banks, and livestock marketers. Left unchecked, Section 199A’s uncompetitive impacts will ripple across many other
industries.

Prior to the TCJA, Section 199 of the tax code allowed certain businesses, including farmer cooperatives, a tax deduction for “qualified production activities” which was incredibly beneficial to farmer cooperatives. Unfortunately, Section 199A goes too far
and has created a tax advantage for producers who sell to cooperatives instead of private and independent businesses. Thus, producers’ marketing decisions are skewed by a strong economic incentive to sell to cooperatives rather than private and independent
businesses. We’re concerned this provision unfairly distorts the marketplace with the potential to reduce competition, directly harm small and independent businesses, and increase consolidation in the agricultural industry.

The unintended consequences caused by this Senate provision to the TCJA must be addressed immediately. The remedy should retroactively restore the competitive marketplace for agricultural producers and replicate the tax benefits accorded to cooperatives
and their farmer-patrons under Section 199 prior to the enactment of Section 199A.

Sincerely,

Related Legislative Issues
Selected legislative information:Agriculture, Small Business, Taxes
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