Provision in New Tax Law Irks Some Grain Merchandisers

A provision that was included in the federal tax reform law that was signed into law in late December has drawn the ire of certain grain merchandisers across the U.S. The provision, which was a compromise to replace an expiring provision (Section 199; Domestic Production) that benefited cooperatives and their members, became a new tax policy that allows for farmers to take new tax deductions related to grain they sell to marketing cooperatives. Under the new provision, farmers can deduct up to 20 percent of their total sales to marketing cooperatives while only allowing a much smaller deduction for conducting sales with non-cooperative buyers.

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