Since its introduction in 2004, the Domestic Production Activities Deduction (DPAD), also known as Section 199, has been a vital pass-through for Land O’Lakes, Inc. member-owners and the entire agricultural community. This year, our dairy members received $90 million (approximately 72 cents per hundredweight), and ag members received $23 million through this deduction. And nationwide, the deduction returns an estimated $2 billion each year to farmers and their rural communities.
Unfortunately, this deduction is now at risk as the recently introduced House and Senate Tax Reform Bills would eliminate the Section 199 deduction. While Land O’Lakes supports tax reform, we are deeply concerned about the potential elimination of this valuable tax deduction.
Supporters of the plan to repeal the deduction say that larger business tax cuts and lower pass-through tax rates (profits of a business passed through to the business owners) will more than make up for the loss of Section 199. We are thoroughly reviewing the House bill language but do not believe that the values of the lower corporate, individual and pass through rates or the elimination of the estate tax would offset the value of this deduction for the nation’s co-ops and the majority of their farmer-owners.
While each of your businesses are very different, we remain concerned that the loss of the Section 199 Domestic Production Activities Deduction will have a net negative impact on the majority of members. Help us protect this deduction that benefits cooperatives, their farmer-members and the larger rural economy by contacting your members of Congress today and delivering these simple messages:
Ending the DPAD for agriculture will raises taxes for farmers and ranchers in our state.
This provision has worked as intended and has helped to create jobs and boost the rural economy.
We need tax reform that puts more money into rural communities, not less.
We’ve made it easy for you to contact your member of Congress through our dedicated Legislative Action Center:
Visit the Land O’Lakes Legislative Action Center
Add your name and sender information in sections 1 and 2
Click “Send Message”
Act now and ask Congress to protect Section 199 and support tax reform that benefits farmers and the agricultural community.