Late last month, a group of Democratic senators, including Cory Booker (N.J.), Debbie Stabenow (Mich.), Raphael Warnock (Ga.), and Tina Smith (Minn.), all members of the Senate Committee on Agriculture, Nutrition and Forestry, reintroduced the Family Farmer and Rancher Tax Fairness Act.
The legislation would remove the tax liability for distressed farmers on the assistance provided under Sections 22006 and 22007 of the Inflation Reduction Act (IRA). Currently, farm loan borrowers who are already at financial risk are facing tax liability on the IRA assistance.
“The critical financial assistance we fought to include in the Inflation Reduction Act is a lifeline for farmers around the country struggling to hold on to their farms,” said Booker. “However, those same farmers are now facing a burdensome tax liability that can plunge them into deeper debt. Congress must quickly remove these tax liabilities to ensure that farmers who received assistance stay on the path back to financial stability.”
Section 22006 of the IRA authorizes payments to distressed farm loan borrowers, particularly those borrowers whose agricultural operations are at financial risk. Section 22007 of the IRA provides financial assistance to Black farmers and others who have suffered discrimination through USDA’s farm lending programs. Distressed borrowers with qualifying USDA farm loans have already received nearly $800 million in assistance as part of the $3.1 billion for distressed farm loan borrowers provided through Section 22006, and these farmers face IRS tax liability.
Full text of the proposed legislation can be found here.
