Tax News

CCH (cch.taxgroup.com) reports:

  The Senate voted overwhelmingly on May 22 to override President's Bush veto of the Food, Conservation, and Energy Act of 2008 (HR 2419). Senate Committee on Agriculture, Nutrition and Forestry Chairman Tom Harkin, D-Iowa, said the 82-to-13 Senate vote proves that a bipartisan majority of Congress believes that the critical farm and nutrition legislation should become law. The Senate action follows a House vote on May 21 to override the veto by a vote of 316 to 108 (TAXDAY, 2008/05/22, W.1).

  The farm bill ran into problems during the House vote, however, when lawmakers discovered that farm bill that Bush vetoed was not the measure that Congress passed on May 15, because the enrolled version did not include Title 3. However, Harkin, who noted the enrollment problem with the legislation, said that, with the Senate action, "14 of the 15 titles in this farm bill are now law. We don't require anybody else's signature." Harkin predicted that the Senate will return after the Memorial Day break and pass Title 3, but action could wait for at least two weeks.

  The White House maintained that the bill would unnecessarily subsidize wealthy farmers at a time of record farm income and soaring food prices, and "force many businesses to prepay their taxes in order to finance the additional spending" in the measure. Senate Finance Committee Chairman Max Baucus, D-Mont., said that he supported the permanent agriculture disaster assistance trust fund and nearly $2 billion in farm tax relief included in the comprehensive farm legislation.

  The farm tax relief is largely paid for by a reduction in the current tax credit for ethanol production. Other revenue offsets include acceleration of certain large corporation estimated tax payments and new limits on excess farm losses. Among the tax-relief provisions, the bill includes a cellulosic biofuels credit, endangered species deduction, depreciation for race horses and forest conservation bonds.

  By Stephen K. Cooper, CCH News Staff

SFC Release: Farm Bill'S Disaster Aid, Reforms & Tax Relief Become Law As Senate Overrides Veto