Daily Tax Update - May 2, 2008

PRESIDENT SIGNS FARM BILL EXTENSION / FARM BILL TAX PROVISIONS ANNOUNCED: Today, President Bush signed into law a two-week extension of existing agriculture policy. The conferees are still working to resolve differences between the House- and Senate-passed versions of the bill.

• According to the Finance Committee, "Farm bill negotiators expect to act Tuesday on a final package of farm tax reforms funding farm tax relief, as well as an offset package of agriculture and economic aid trade measures. Following is a list of the agreement’s elements. The agreement is fully offset. Estimated savings and costs for overall tax reform, overall tax relief, and individual provisions will be made available, as will additional explanation of each provision."

Farm Tax Reforms

• Optional Self-Employment Tax for Social Security
• Reduce Ethanol Credit
• Limit Denaturant from Alcohol Fuels Credit
• Limitation on Farming Losses of Certain Taxpayers
• Extend Tariff on Imported Ethanol
• Information Reporting for Commodity Credit Corporation Transactions
• Duty Drawback on Certain Imported Ethanol
• Addition of Biodiesel and Alcohol to Definition of Taxable Fuel

Farm Tax Relief and Incentives

Conservation: 

• Self-Employment Tax Relief for Retired and Disabled Farmers Receiving Conservation Reserve Payments
• Permanent Deduction for Endangered Species Act Expenditures
• Extension of Conservation Easement Deduction
• Forest Conservation Bonds
• New Maximum Tax Rate for Qualified Timber Sales and Timber REIT Modernization

Agricultural Investments:

• Aggie Bond Improvements
• Like-Kind Exchanges for Stock in Ditch, Reservoirs and Irrigation Companies
• Agricultural Business Security Tax Credit
• Kansas Tornado Disaster Relief
• Equine Depreciation

Alternative and Renewable Fuels from Agriculture:

• Establish Cellulosic Biofuels Credit, with accompanying study

TAX BILL INTRODUCED MAY 1ST:
H.R.5952: To amend the Internal Revenue Code of 1986 to authorize tax credit bonds for capital improvements for police and fire departments.
Sponsor: Rep Schwartz, Allyson Y. [PA-13] (introduced 5/1/2008) Cosponsors (None)

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