Tax relief for farmers, ranchers, and producers

How does this legislation protect family farms and ranches? 

The Working Families Tax Cuts Act makes the increased Death Tax exemption permanent so families can pass farms, ranches, and small businesses to their children without facing a large federal tax bill. This helps prevent families from being forced to sell land or equipment just to cover estate taxes. 

How does the Section 199A deduction help family farms and small businesses? 

The legislation makes the Section 199A small business deduction permanent. In 2020 alone, 67,000 taxpayers in North Dakota, including many farmers, claimed the 199A deduction—keeping $682 million in their pockets. This provision allows many small businesses to deduct up to 20 percent of their qualified business income. Lowering the tax burden helps farmers and small business owners reinvest in their operations, hire workers, and continue growing in rural communities. 

How does this legislation strengthen farm safety nets? 

The legislation increases reference prices used in key farm safety net programs by 10 to 20 percent depending on the commodity. These reference prices are used in the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs to determine when farmers receive support during periods of low prices or revenue. Updating these levels help the programs reflect current market realities. Click here to learn more. 

How does 100 percent expensing support farmers and rural businesses? 

The Working Families Tax Cuts Act makes permanent 100 percent immediate expensing for equipment purchases and research and development. This allows farmers and small businesses to deduct the full cost of qualifying investments in the year they are made rather than spreading the deduction over several years. Immediate expensing helps reduce upfront costs and makes it easier for businesses to upgrade equipment, adopt new technologies, and expand operations. 

How does the legislation encourage new manufacturing investment in rural communities? 

The legislation also creates 100 percent accelerated depreciation for new industrial and manufacturing facilities that begin construction between 2025 and 2028. This policy helps attract investment in new factories and production facilities by allowing companies to deduct the full cost of construction more quickly. 

What new tax benefit supports loans for farmers and rural property? 

The legislation created a new tax incentive (Internal Revenue Code Section 139L) to expand access to credit financing. Certain lenders can exclude 25 percent of the interest income they receive from loans secured by farm or rural real estate from federal taxable income. This tax benefit applies to qualifying loans made on or after July 4, 2025, and helps encourage banks and other lenders to provide more affordable financing for farmland, agricultural operations, and rural property development.  

Is there new tax relief when farmland is sold to a working farmer? 

Yes. The legislation allows taxpayers who sell qualified farmland to an actively engaged farmer to spread the tax owed on the sale over four years instead of paying it all at once. The first payment is due with the tax return for the year of the sale, and the remaining payments are made in equal installments over the next three years. 

To qualify, the property must have been used as farmland—or leased to a farmer—for most of the previous 10 years, and it must remain restricted to agricultural use for 10 years after the sale. The buyer must also be an individual who is actively engaged in farming. This policy helps make it easier for farmland to stay in agricultural production and supports farmers who want to expand or continue family farming operations. 

What changes were made to support sugar producers? 

The legislation extends the federal sugar program through 2031 and updates the program’s loan rate structure. Under the program, sugar producers can obtain nonrecourse loans from the U.S. Department of Agriculture using sugar as collateral. Updating the loan rate helps allow continued price stability for producers while maintaining the policy’s no-cost design for taxpayers. 

How does the legislation help livestock producers facing drought? 

The bill strengthens livestock disaster programs administered through USDA, particularly those addressing losses caused by drought. Programs such as the Livestock Forage Disaster Program (LFP) and related assistance mechanisms help producers recover from grazing losses caused by drought conditions. Updates to these programs help ranchers receive more timely and reliable support during severe weather events. 

How does the Working Families Tax Cuts Act strengthen Opportunity Zones in rural communities? 

The law makes it easier to invest in rural Opportunity Zones by lowering the required level of property improvements. Beginning July 4, 2025, investors only need to increase the value of a property by 50 percent instead of 100 percent for projects located entirely in rural Opportunity Zones. By lowering the improvement requirement for rural projects, the policy helps attract more capital to smaller communities. 

ICYMI: USDA has opened enrollment for the $11 billion Farmer Bridge Assistanceprogram to help row crop producers manage rising input costs and recent trade disruptions. Applications are open through April 17, and my office is available to help North Dakota producers navigate the process. Click here for more information.  

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