Congress May Fix Unintended Tax Edge for Farm Co-Ops Over Cargill
- Crop sales to co-ops incentivized by provision in tax bill
- Lawmakers looking for remedies, say impact was unintentional
Photographer: Daniel Acker/Bloomberg
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A provision in last month’s U.S. tax overhaul that gives farmers the opportunity to significantly minimize their taxable income is drawing fire from some companies who could lose out as a result, while two Senators behind the change pledged to fix the problem.
The measure in question gives farmers a bigger deduction if they sell crops to agricultural co-operatives. That appears to be a win for farmer-owned agribusinesses such as CHS Inc. at the expense of other major crop buyers like Archer Daniels Midland Co., Bunge Ltd. and Cargill Inc.