December 2015

December 2015


2015 in Review: An Ag Law Summary

As we store away the wrapping paper and pull out the New Years’ hats and horns, we thought it would be a good time to review the significant agricultural law developments of 2015. While this review is not comprehensive or intended to rank the topics in order of importance, it does demonstrate how much can change in a year.  So, pour that last glass of egg nog and savor the last few hours of the year. If this list is any indication, it’s going to be a busy 2016.

The Clean Water Rule: Waters Rage

Water quality was a hot topic in agricultural law in 2015. The EPA and Army Corps unveiled their long-awaited final Clean Water Rule on May 27, 2015. Originally called the Waters of the United States Rule (or WOTUS), the controversial proposed rule had been pending for more than a year. The final rule, which made several changes and added several exemptions, did not allay the fears of its detractors. In fact, upon publication of the Rule on June 29, 2015. litigation immediately ensued.

The Rule is facing legal challenges on many fronts. In addition to the majority of States in the Union, many other plaintiffs—including farm groups, industry groups, and even environmental groups—have filed legal complaints challenging the Rule. Most plaintiffs are asking the courts to vacate the Rule in its entirety.  Most of the lawsuits filed by states were initiated by the attorneys general of those states. In mid-November, Iowa Governor Terry Branstad joined the North Dakota lawsuit on behalf of the State of Iowa. Although the various complaints seek multiple forms of relief, they generally ask the courts to declare that the rule is unlawful because it...

To continue to read about this issue and the nine other topics reviewed in this article, please click here.


Congress Permanently Extends Several Key Tax Breaks

On Friday, December 18, 2015, President Obama signed into law a massive bill authorizing $1.1 trillion in spending and $680 billion in tax cuts. While we have become accustomed to waiting until year-end (or sometimes new year) to see already-expired tax cuts temporarily revived, this new law actually makes permanent (or largely extends) several important tax breaks. For this reason, the Protecting Americans from Tax Hikes Act of 2015 is different from its predecessors. The new Act provides welcomed certainty for farm producers and others who often base purchasing or investment decisions on their tax consequences.

Signed into law almost one year to the date after last year’s Tax Increase Prevention Act of 2014, the new Act permanently implements, instead of temporarily resurrecting, several provisions of particular interest to farm producers. Following is a summary of the new Act’s key provisions.

Section 179 Deduction

Perhaps most important to farmers, the new Act permanently implements an enhanced “Section 179” deduction, sometimes called expense method depreciation. As of January 1, 2015, this deduction decreased to $25,000, with an investment ceiling of only $200,000. Amending I.R.C. § 179, the new Act allows farmers and small businesses to deduct $500,000 of the tax basis of certain business property or equipment during the year in which the property was placed into service. The spending cap is increased from $200,000 to $2 million, meaning that the deduction will begin a dollar-for-dollar phase-out only when the taxpayer spends more than $2 million on qualifying assets. These changes are implemented with a retroactive effective date of January 1, 2015. Future amounts will be indexed for inflation.

To continue reading, please click here.


From TaxPlace: 2016 Means New ACA Forms and New Due Dates For Employers

On December 28, 2015, IRS issued Notice 2016-4, extending the deadline (for tax year 2015 only) for those required to comply with ACA information reporting requirements. This article provides background for and a summary of the new reporting requirements, as impacted by the new guidance. It also provides a helpful summary chart.

Background

The Affordable Care Act instituted a number of changes to the Internal Revenue Code to facilitate the implementation of a new nationwide healthcare system. IRC § 5000A, added to the Code by §1501(b) of the ACA, generally provides that individuals must (1) have minimum essential coverage, (2) qualify for an exemption from the minimum essential coverage requirement, or (3) make an individual shared responsibility payment at the time they file their federal income tax returns. This individual shared responsibility payment requirement (which was implemented first for the 2014 tax year) is one of the backbones of the system. Without this penalty, healthy individuals would be less likely to participate, thereby destroying risk pools and ultimately making costs unsustainable.

To continue reading on TaxPlace, click here.

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