By Isabella Chism

When people outside the agriculture community visit my family’s farm, they’re often surprised to see how much technology we use when growing corn and soybeans. Advanced tech allows us to practice precision agriculture, a data-driven approach to farming that helps us reduce the use of fertilizer, pesticides and other inputs while producing the same amount of food.

But a change in the country’s tax policy is making it harder and more expensive for farmers like me to invest in the equipment that makes those sustainable practices possible. Fortunately, the U.S. House of Representatives has already passed a fix. The Senate must now quickly follow suit or small business owners will be forced to make the difficult decision between reducing investments or raising prices for our customers. Unfortunately either choice will have adverse ripple effects for our communities, our nation — and our planet.

Between 2018 and 2022, companies could deduct the entire cost of investments in equipment and technology in the same year the expense was made. The policy, known as 100% bonus depreciation or full expensing, only applies to investments made in the United States and was available to businesses of all sizes. Businesses ranging from dental practices to construction firms have relied on this policy. Last year, the policy started to expire, and companies could only deduct 80% of the cost of investments immediately. Unless Congress acts, by 2026, the upfront cost recovery option will be gone entirely. 

Speaking from first-hand experience, full expensing can be the difference between investing in a new, more efficient sprayer that reduces pesticide use and makes an operation more sustainable or delaying the expense indefinitely. While the policy was in place, businesses used it to reinvest, so they could better serve their customers, boost wages and grow. 

A 2021 Georgetown University study found states with full expensing had “five percent higher compensation for workers in their manufacturing sectors” than states that did not have the policy. A separate assessment from the University of Pennsylvania’s Wharton School of Business concluded manufacturing facilities that used full expensing increased their levels of investment and employee wages when the policy was in place.

Reinstating full expensing will bring these economic benefits to our country, but it also brings other tangible benefits as well. Full expensing is behind the rapid expansion of 5G infrastructure across the nation, and it’s helped companies bring semiconductor manufacturing back to the United States – two technologies that are vitally important to precision agriculture.

A recent study from the nonpartisan Tax Foundation found the extension would reduce the long-run debt-to-GDP ratio by 0.3 percentage points. Moreover, not acting comes with its own costs. The Congressional Budget Office predicts the phaseout of full expensing will slow economic growth.

With one vote, the Senate can support everyone from farmers to furniture makers. They must stand up for small business and quickly pass the extension of full expensing.  

Isabella Chism is an Indiana farmer and chairwoman of the American Farm Bureau Women’s Leadership Committee.

By Bryan Slone

Nebraska’s core industries are increasingly challenged by changes in our economic environment.   As one example, agriculture sector income is expected to fall 26% this year, down nearly $40 billion from last year, according to a recent USDA forecast. A combination of weak commodity prices, high interest rates and inflation are putting pressure on farmers here and nationwide.

Absent Congressional action, a change in tax policy will make investing in new business and farm equipment more expensive. Specifically, unless the U.S. Senate also passes a tax reform bill — that the House of Representatives has already approved — farmers and other small and large business owners will see the cost of reinvesting in their businesses spike. It’s a change that could slow economic growth, harm workers and drive-up costs for consumers. 

The policy in question is called bonus depreciation or first-year expensing. From 2018 to 2022, companies of all sizes under the Internal Revenue Code could deduct the entire cost of domestic investments in equipment and technology in the same year the purchase was made rather than wait to deduct that expense in later years. Unfortunately, a phase-out of that provision began in 2023. The Congressional Budget Office forecasts the ultimate expiration of first-year expensing will slow economic growth, meaning every business will feel the shift.  

First-year expensing stimulates economic growth. One study found that states with first-year expensing had higher levels of both investment and employment than those that didn’t. Another assessment determined first-year expensing was associated with higher wages for employees.

More broadly, anyone with a cell phone has benefited. The policy made it possible for telecommunications companies to deploy 5G technology more quickly than originally anticipated, leading to better cell service for many of us. Companies have also used it to strengthen America’s supply chains by bringing manufacturing facilities back home. 

These benefits explain why a bill extending first-year expensing passed the House of Representatives with overwhelming bipartisan support; 357 of the body’s 435 members voted to approve it.

The NE Chamber has been advocating for tax laws that assist our core industries in making substantial new technology and equipment investments to maintain our competitive capabilities in our core industries. Our Congressional policymakers can make a real difference in lowering the costs of new business investments and create better paying jobs by extending the first-year expensing provision.

Bryan Slone is the president of the Nebraska Chamber of Commerce and Industry. 

By Sam Castillo

When my company wants to invest in our heavy equipment rental fleet — cement mixers, backhoes, excavators or welding equipment — we make it a point to buy from other local companies. It’s a way to grow our employee-owned business as well as feed our community’s economy at the same time. 

But a change in the federal tax code is making it harder and more expensive for us to reinvest in new equipment. Unless the U.S. Senate quickly passes the bipartisan tax reform package the House recently approved (H.R. 7024), companies equipment rental companies like mine, as well as businesses in other top Idaho industries such as agriculture, aerospace and semiconductor manufacturing, will see the cost of investments spike. We will be forced to choose between two bad options: cutting investments or raising prices. Neither choice is a good one for our business, the local economy or the people in our community.

From 2018 to 2022, businesses of all sizes were able to deduct the full cost of investments made in the United States in equipment and technology in the year the expense was incurred, under a policy known as “full expensing” or “bonus depreciation.” Here in Idaho, farmers could use it to buy new tractors or sprayers, semiconductor manufacturers to make upgrades to their facilities and aerospace companies to replace their fleets. This policy started to phase down by 20% a year beginning in 2023 and without action from Congress and the President, companies will lose the option to recover any portion of the up front costs of these investments entirely by 2026.

Fortunately, there is a path forward. The House of Representatives has already passed a tax bill — with the support of 357 of 435 members — that extends full expensing. Now, it’s time for the Senate to act and stand up for small- and medium-sized businesses. 

As the overwhelming support for the bill in the House shows, this is not an issue of politics. As the data shows, it’s simply smart policy. One study from Georgetown University found full expensing is associated with higher levels of both employee compensation and capital expenditures. Another assessment found the policy boosted employment and rates of investment.

Behind these data points are investments that bolster American competitiveness and strengthen our supply chains. Full expensing made it possible for telecommunications companies to build out 5G infrastructure far faster than initially forecasted. This spending benefits all industries and, indeed, anyone who uses a cell phone to check their email. Businesses have also used full expensing to build semiconductor and drug manufacturing plants, bringing critical supply chains back to the United States. And then there are small and medium-sized companies, like mine, that rely on full expensing to make the domestic investments that allow us to grow, hire more people and raise wages for our employees here at home.

Critics of full expensing say extending it is too expensive, but a new assessment from the nonpartisan Tax Foundationconcluded extending bonus depreciation would actually reduce the long-run debt-to-GDP ratio by 0.3 percentage points. In addition, the Congressional Budget Office forecasts the phaseout of full expensing will slow the nation’s economic growth.

When we invest in our small businesses, we’re also investing in our communities — and our nation’s economy. Now, we’re asking the Senate to invest in us by passing the House passed tax package that will put us all — our people, our businesses and our communities — on a path to success. 

Sam Castillo is a senior account manager at Tates Rents, an employee-owned business in Idaho. 

By John Scott

People who live in North Carolina, one of the nation’s few swing states, are used to candidates coming our way during election years.  Over the next few months, among other things, we’ll hear a lot about how important they think small businesses are to our state and the country. 

As a small business owner, I can tell you these politicians are right. Companies like mine are the backbone of our economy. Roughly half of Americans work for a small business, and we create 1.5 million jobs annually — 64% of all U.S. jobs. The most recent report from the Small Business Administration noted that small businesses account for 44% of all U.S. economic activity. After years of economic uncertainty and several periods of high inflation, now is the time to enact tax policies that help small businesses thrive. 

Members of Congress currently have an opportunity pending before them to put actions behind their words and demonstrate their support for small businesses by passing tax legislation that makes it easier for us to reinvest in and grow our companies. The House has already passed such a measure (H.R. 7024), with strong bipartisan support. Now it’s time for the Senate to step up and do the same.

The tax bill includes extension of a provision called “full expensing” or “bonus depreciation.” It allows businesses of all sizes to deduct the full cost of domestic investments made in equipment and technology in the year the expense is incurred. Economists and political leaders on both sides of the aisle support full expensing because it benefits businesses, workers and the national economy. 

Full expensing was in place from 2018 to 2022 and began to phase down by 20% a year starting in 2023. Unless the Senate approves the House passed tax bill, the ability to recover any up front portion of the cost of these types of investments will be gone altogether by 2026. This is one of those critical moments when decisions in Washington can dramatically impact a small business like mine in North Carolina. 

I’ve seen first-hand the benefits that full expensing provides. My company, which rents heavy equipment to contractors and homeowners, spends more than $1 million annually investing in our fleet of augers, excavators, forklifts and more. This spending ensures we can offer customers the best possible products and that they can trust us to meet their construction project needs. We pour the tax savings from full expensing back into our employees, who earn more than the state average wage and enjoy a robust benefits package. I hear similar stories from other business owners in industries ranging from car washes to dentistry and more. 

Several studies back up my experience and what I hear anecdotally. One conducted by Georgetown Universityfound states that had full expensing in place had both higher levels of capital expenditures — with positive ripple effects at the community level — and higher compensation. In another study, researchers at the University of Pennsylvania’s Wharton School of Business concluded facilities that used full expensing reported 15.8% higher investment flows than plants that did not use the policy. Full expensing is particularly important during periods of high inflation, which we’re living through today. 

These benefits illustrate why the House of Representatives passed H.R. 7024 overwhelmingly, with both Democrats and Republicans supporting it. The Senate should now follow suit and quickly pass this bill. This is a chance for senators to put real action behind their words and support tax policies that will help small businesses. Small businesses owners in North Carolina, and across the nation, are watching.