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Sales & Use Tax Exemption for Some Farmers in Washington State

1 week ago | farmcpareport.com | Paul Neiffer

Most farmers in the US are not subject to paying sales or use tax when they purchase farm equipment. However, Washington State historically has required farmers to pay these taxes for several years. Starting October 1, 2025, certain farmers will be exempt from owing these taxes. This exemption only applies to farmers whose gross sales from agricultural products is less than $2 million.
How Much SALT Do I Get in 2026

1 week ago | farmcpareport.com | Paul Neiffer

The House tax proposal increased the state and local tax (SALT) limit for individuals from the current $10,000 limit to $40,000 and then would start phasing that out once your income hit $500,000. However, many states have what is called a pass-through entity tax (PTET) system that allows partnerships and S corporations to pay the SALT for the individuals directly.
Summary of Key Tax Changes from Senate Finance Committee

1 week ago | farmcpareport.com | Paul Neiffer

The Senate Finance Committee released their proposals for the One Big Beautiful Bill on Monday. In most cases, the followed the House proposal but there are several key changes, and the changes are material in some cases and will certainly require negotiation between the House and Senate to get it across the finish line. We will summarize some of the key changes from the House version in this post and will provide additional clarity as we get more details.
Table Comparing House and Senate Ag Proposals

1 week ago | farmcpareport.com | Paul Neiffer

Now that the House and Senate have provided their “Farm Bill” proposals, we thought it would be good to provide a table summarizing the various proposals. In most cases, the Senate mirrors the House’s proposals but not in all cases. Attached is the table summarizing the proposals:
Key Details on Senate Ag Proposals

2 weeks ago | farmcpareport.com | Paul Neiffer

The Senate Ag Committee released the Agriculture, Nutrition and Forestry Budget Reconciliation details yesterday. In today’s post we will review the key changes versus the House proposal. This Substack is reader-supported. To receive new posts and support my work, consider becoming a free or paid subscriber. The calculation of the effective reference price (EFR) will now have a floor of 88% on the five-year Olympic average calculation.
Finally, the IRS has a Code for QCD

2 weeks ago | farmcpareport.com | Paul Neiffer

Taxpayers have been allowed to directly transfer funds from their IRA to charity for almost 20 years now and there can be substantial benefit for the taxpayers. First, the taxpayer must be at least age 70 1/2 (not the year they turn that age). The 2025 limit is $108,000 per taxpayer; therefore a married couple could contribute $216,000 (assuming they have that much in their IRA). This is only available for IRA distributions.
When are Wages From a Family Corporation Considered Farm Income

2 weeks ago | farmcpareport.com | Paul Neiffer

FSA started to consider wages and dividends including IC-DISC dividends paid from a qualifying farm corporation or entity as farm income. This has been helpful for many farmers to qualify for an extra payment limit when their farm income needs to be more than 75% of total average income or AGI.
Update on SDRP Calculator

2 weeks ago | farmcpareport.com | Paul Neiffer

It looks like some of you are actually using our SDRP calculator since we were informed of an error in our calculator. The error was it was picking up the 75% payment level related to what FSA would pay not the correct amount of coverage you originally elected. We have fixed the error, and the new spreadsheet is available for download. Sdrp Payment Calculator12.7KB ∙ XLSX fileThis Substack is reader-supported. To receive new posts and support my work, consider becoming a free or paid subscriber.
FSA Provides Update on Average Gross Income

3 weeks ago | farmcpareport.com | Paul Neiffer

FSA yesterday released FSA notice PL-313. This notice provides updated guidance for calculating average gross income for purposes of meeting the more than 75% farm average gross income requirements under the ECAP program to allow for an increased payment limit. These guidelines will likely be incorporated into Handbook 6-PL soon.
Will a Floor on Corn PLC Really Reduce PLC Payments to Farmers

3 weeks ago | farmcpareport.com | Paul Neiffer

The House Ag proposals have an increase in the reference price for corn up to $4.10 from $3.70. This will result in an average effective reference price (EFR) or around $4.30 for a couple of years. However, for PLC, the maximum that the price of corn can drop to is the loan rate. The loan rate for corn has been raised from $2.20 to $2.42. But for purposes of the corn PLC calculation, there is an artificial floor on the loan rate of $3.30.