Trade Association Challenges California's Animal Confinement Law
On October 4, 2019, the North American Meat Institute (AMI) filed a complaint against the state of California over Proposition 12, which passed last year. The complaint alleges Proposition 12 violates the Commerce Clause by discriminating against out-of-state veal and pork producers through a sales ban on veal and pork products not raised under certain conditions.
In November 2018, the California voters enacted Proposition 12. This law created new minimum size requirements for confinement of breeding pigs, veal calves, and egg-laying hens. It prohibited confining any covered animal in a cruel manner and established minimum space requirements for those animals. Additionally, the law prohibited any business from selling whole veal meat and whole pork meat if the animal was confined in a cruel manner, or, in the case of pork, is the offspring of an animal who was confined in a cruel manner.
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ISU Releases Deductible Livestock Costs for Adjusting 2019 Returns
Every year, Dr. Alejandro Plastina calculates estimated deductible costs for use in adjusting farm expenses to exclude the cost of producing
home-consumed farm produce. The 2019 numbers are found here.
Iowa Department of Revenue Has Issued New Income Withholding Tax Tables for 2020
The Iowa Department of Revenue has just released updated income tax withholding tables for 2020 to continue to align Iowa withholding with recent changes in state tax laws. The tables can be found here. The Department has also issued a new withholding calculator.
On October 29, 2019, USDA issued an interim final rule for the establishment of a Domestic Hemp Production Program. The rule implements provisions within the 2018 Farm Bill authorizing the production and transportation of hemp. The rule is effective from October 31, 2019, through November 1, 2021. USDA is accepting comments through December 30, 2019.
The 2018 Farm Bill, signed into law December 20, 2018, exempted hemp from the federal list of Schedule l controlled substances and added it to the list of agricultural commodities eligible for crop insurance. It also authorizes producers to grow hemp pursuant to a state, tribal, or federal plan. Under the new Domestic Hemp Production Program (Program), states or tribes may choose to regulate hemp production within their jurisdictions by submitting a plan for approval to the USDA. If a state or tribe chooses not to adopt its own plan, producers may grow hemp in those jurisdictions (if it is otherwise legal to grow) pursuant to a federal plan developed by the USDA. The interim final rule establishes the technical requirements for the Program, specifically setting forth the details for:
- Maintaining information on the land on which hemp is produced
- Testing the THC concentration levels for hemp
- Disposing of non-compliant plants
- Compliance provisions
- Handling violations
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On October 16, 2019, the United States Tax Court issued an opinion determining the correct way for an agricultural cooperative to characterize payments made to patrons and to calculate its DPAD deduction. Although IRC § 199 (DPAD) was repealed by the Tax Cuts and Jobs Act for tax years beginning on or after January 1, 2018, the opinion remains timely and relevant. It addresses several key issues involving IRS’ proposed regulations for the § 199A(g) “new” DPAD deduction, and arrives in time to inform IRS’ work in finalizing those regulations.
Ag Processing v. Commissioner, 153 T.C. 3 (2019) arose because IRS disputed an agricultural cooperative’s calculation of its DPAD, including its impact on taxable income, for tax years 2007, 2008, and 2009. The cooperative was a non-exempt agricultural cooperative primarily engaged in processing and marketing soybeans purchased from members and nonmembers. The cooperative’s members included over 170 local farmer-owned cooperatives and several regional cooperatives. The cooperative conducted business with its members on a patronage basis, and members were eligible to share in patronage dividends paid by the cooperative. The cooperative also conducted business with nonmembers on a non-cooperative basis and nonmembers were not entitled to share in patronage dividends paid by the cooperative.
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There's Still Time to Join Us at Tax School!
We've hit the road for our 46th Annual Federal Income Tax Schools and have one Iowa school and three Wisconsin schools under our belt. Thanks to those of you who have attended! We've had a great time. If you haven't yet registered, we'd love to have you join us at one of these upcoming schools:
- Mason City, November 7-8
- Fairfield, November 11-12
- LeMars, November 14-15
- Atlantic, November 21-22
- Waterloo, November 25-26
- Ames, December 9-10 (in person and online)
In addition to receiving a copy of the 720-page National Income Tax Workbook for 2019, you will hear from the new policy directors from the Iowa Department of Revenue, learn from our IRS stakeholder liaison, ask questions and share insights with other professionals, spend two days preparing for the 2020 filing season, and maybe win a tractor (a small one, that is!). Register today!
Lots of Draft Forms Coming Out!
IRS has been issuing a number of draft forms and instructions. Of particular interest are the draft Form 1065 instructions for 2019, which specify a number of reporting changes from 2018, a draft Form 1099-NEC for 2020, and the draft instructions for the 2019 Form 1040.
Helpful Tax Tables and Charts
We continue to update important tax figures and numbers as they are released by IRS. Download this rates and tables document for a helpful resource. We will continue to update it on TaxPlace as more information is released.
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.