Tax Changes Offer Long-Term Stability for Ag Producers

Permanent reinstatement of 100% bonus depreciation

New tax provisions enacted through the One Big Beautiful Bill Act, signed into law on July 4, are scheduled to take effect beginning January 1. The legislation builds on the foundation of the 2017 Tax Cuts and Jobs Act by extending multiple tax measures that were due to expire or gradually phase out at the end of this year.

Among the most impactful changes for agricultural producers is the permanent reinstatement of 100% bonus depreciation. This allows businesses to fully deduct the cost of qualifying assets in the year they are placed into service, rather than depreciating them over time. The change provides added flexibility for producers investing in equipment and infrastructure.

The bill also permanently increases the federal estate tax exemption to $15 million per individual beginning in 2026, with annual inflation adjustments. For 2025, the exemption stands just under $14 million. Any portion of an estate exceeding the exemption continues to be taxed at a 40% rate when transferred to heirs.

Another key update involves Section 179 expensing, which was expanded to $2.5 million. This is a substantial increase from the $1.25 million limit set for 2025 and prevents the reduction to $1 million that had been planned for 2026. The provision applies to qualifying business purchases, including machinery, vehicles, and equipment.

The qualified business income deduction under Section 199A was also made permanent, with the deduction rate increasing to 23% in 2026. Additionally, the bill secures lower tax rates, expanded tax brackets, and a higher standard deduction originally established by the TCJA.

The National Pork Producers Council supported the legislation, noting that stable and predictable tax policy is critical for maintaining profitability, supporting growth, and enabling long-term planning across the pork industry.

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