NGFA praises Section 199A fix in omnibus spending bill

ARLINGTON, Va. March 23, 2018 — The National Grain and Feed Association (NGFA) today commended Congress for voting to pass and President Donald Trump for signing into the law the stakeholder-driven provisions included in the omnibus fiscal year 2018 appropriations bill that corrects the unintended consequences of Section 199A of the Tax Cuts and Jobs Act of 2017.

 

The House voted on the omnibus legislation (H.R. 1625) on March 22, with the Senate subsequently voting to pass the bill late last night. Trump signed the bill earlier today prior to the midnight deadline to avert another shutdown of the federal government. The provisions amending Section 199A are retroactive to Jan. 1, 2018.

 

U.S. Secretary of Agriculture Sonny Perdue, who during his keynote address at NGFA’s 122^nd annual convention had stressed the need to rectify the unintended consequences of Section 199A, issued a media statement today saying that “fixing Section 199A was a fundamental issue of fairness.”

 

“We should not be picking winners and losers through the federal tax code by favoring one side over another,” Perdue said. “During my travels across the country, I met with countless farmers and members of the agriculture community who were affected by this so-called ‘grain glitch.’ I applaud Congress for hearing their voice.”

 

The NGFA and National Council of Farmer Cooperatives had issued a joint statement on March 13 supporting prompt enactment of the legislative language, which was developed by the tax-writing committees of Congress after months of collaboration and extensive analysis among and with stakeholders. The provisions replicate to the greatest extent possible the tax benefits accorded to farmer-owned cooperatives and their farmer-patrons under the previous Section 199 (also known as the Domestic Production Activities Deduction, or DPAD), while also restoring the competitive landscape of the marketplace as it existed in December 2017 so that the tax code does not provide an incentive for farmers to do business with a company solely because it is organized as a cooperative or private/independent firm.

 

NGFA President Randy Gordon today commended and expressed profound appreciation to the dedicated tax experts from NGFA-member companies — half derived from cooperatives and half from private/independent organized businesses — who provided “sound, factual advice and analysis in a totally professional and above-board process throughout the two-plus months that it took to develop and analyze the real-world impacts of an equitable concept to correct Section 199A.”

 

He also praised what he called the “indispensable and critical involvement” of hundreds of NGFA-member companies that took the time to repeatedly contact their members of Congress to urge enactment of the solution.

 

NGFA noted that great care was taken by stakeholders to develop a concept that provides tax relief to farmers, as envisioned in the tax-reform law, while restoring to the maximum extent possible the competitive balance of the marketplace. NGFA verified that the final language to correct Section 199A included in the omnibus legislation accurately reflected the concepts developed by NGFA and NCFC.