Two years ago, a Section 199A deduction was included in the federal tax law. “We felt like the legislative language and the intent of Congress was very prescriptive,” says Chuck Conner, CEO, National Council of Farmer Cooperatives. “We were all on the same page, but apparently the language wasn’t tight enough for the Treasury Department.” Now, the Treasury Department is imposing a different tax policy. Conner says a key part of this tax policy is the notion that farm cooperatives can’t use non-patronage income to make the calculation, which has always been used in the past. “This is a limitation that wasn’t part of the negotiations. It is one that results in taking more money out of farmer’s pockets.” Treasury Secretary Steven Mnuchin has heard concerns, but Conner said there’s no certain timeline for finalization. “We’ve been hearing this rule would go final within a matter of weeks, but we’ve been hearing that since before Christmas. I suspect he (Mnuchin) doesn’t want to put a final regulation out there until he has some idea of the level of angst we have with the regulations.”
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