What's Happening?
The One Big Beautiful Bill Act, signed into law on July 4, introduces several tax changes aimed at providing long-term stability for agricultural producers. Key provisions include the permanent reinstatement
of 100% bonus depreciation, allowing businesses to fully deduct the cost of qualifying assets in the year they are placed into service. The federal estate tax exemption will increase to $15 million per individual in 2026, with annual inflation adjustments. Section 179 expensing has been expanded to $2.5 million, and the qualified business income deduction under Section 199A has been made permanent with an increased deduction rate of 23% in 2026.
Why It's Important?
These tax changes are significant for the agricultural sector, providing financial flexibility and predictability for producers. The ability to fully deduct asset costs immediately can encourage investment in new equipment and infrastructure, enhancing productivity and efficiency. The increased estate tax exemption and expanded Section 179 expensing limit offer additional financial planning benefits, supporting generational farm transfers and business growth. The National Pork Producers Council has endorsed the legislation, emphasizing its role in maintaining profitability and enabling long-term planning within the industry.
