During Ag Equipment Intelligence’s Executive Briefing Mid-Year Review June 5, Pinion’s Marc Johnson provided an economic update, during which he highlighted how the Big Beautiful Bill will benefit U.S. equipment dealers. Some of those benefits include the estate tax provision, Section 199A and Bonus Depreciation. 

“You see things like Make America Families Thrive Again, make a Rural American Main Street Grow Again. There's definitely some political football stomping in the end zone kind of thing here as this bill goes through. The good news is it's past the House. We got just about everything in it that we would've wanted as equipment dealers. The estate tax provision comes back to about $15 million per person adjusted for inflation. That starts next year, and they want that to be permanent.”

“The Section 199A that gets pass-through companies down to the same tax rate or closer to the same tax rate as C corporations pay, that's reinstated. In fact, it's gone up to 23% instead of 20%. That's great news. Bonus depreciation also comes back 100% if they bought it after Trump was elected. Kind of a funny notion there that if they bought it between January 1st and January 19th, it doesn't count, but if they bought it January 20th or after, we get 100% bonus depreciation.”

“As auditors, we're joking that you guys are going to get a lot of people coming back in and asking to redo their invoice. Just say January 20th instead of January 12th. Basically, we got about everything we wanted. You kind of look through this thing, our individual rates are back down where we want. Standard deductions are up high. The one complicated thing is the state and local tax deduction. We do get a better deduction now. It goes from 10,000 bucks a year to 30,000 bucks a year.”

“To pay for that, those of you that have gone through a lot of work with your accountants to do what's called a pass-through into the election, where the company is paying the tax for the shareholder, those mechanisms aren't going to be allowed anymore. We did a lot of work to get a deduction for a couple of years. There's a lot of people right now passing out letters that you can sign up to send to your senator to say, "Hey, don't do what the House did. We don't like that. We need the pass-through into the deduction. We need to be able to deduct our taxes."

“Anyway, stay tuned. The House, like I said, they have passed it. The Senate will eventually pass something. We're told that'll be before July 4th, but I doubt that. They're not seeing that the Senate is starting to have a lot of talk about maybe making some changes. We got people that are loyal to the president that are starting to backtrack on that, and so we're seeing a little bit of give. I think we'll still see a tax bill passed, but I don't think it's going to be by July 4th. It'll probably be more like by the end of August.”

For Johnson’s full presentation along with a Q&A discussion with New Holland North America VP Ryan Schaefer, retired President of Oxbo Forage Division Craig Harthoorn and H&R Agri-Power President Steve Hunt, watch the full Mid-Year Review on the Farm Equipment website. 

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