Washington | Reuters — U.S. lawmakers are close to resolving a problem with the new federal tax law that gives grain co-operatives an unintended market edge over private companies, but have had a hard time getting agreement among members of the farm sector, a Republican senator said Thursday.
A provision in the Republican tax overhaul that President Donald Trump signed into law on Dec. 22 allows farmers a 20 per cent deduction on payments for sales of crops to farmer-owned co-operatives, but not for sales to private or investor-owned grain companies such as Archer Daniels Midland and Cargill.
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Senator John Thune told reporters that lawmakers are aiming to get a solution into spending legislation that Congress would need to take up next month. That would replace a measure to keep the government funded through March 23, which lawmakers hoped to adopt on Thursday.
“We haven’t gotten consensus within the stakeholder community on the language, but we have I think probably as good as we’re going to get at a solution,” the South Dakota Republican said.
He declined to disclose details of the prospective solution.
Thune and other Republican lawmakers from grain states have been working to find a solution with interested parties for about six weeks.
“What we found was trying to satisfy co-ops and private grain operators was a challenge, and trying to get both of them to agree on final language has been a real challenge,” Thune said.
Lobbyists initially expected an agreement to be attached to one of the short-term funding bills that Congress has considered this year.
But Thune said it could find a home in a longer-term spending measure, if Congress can agree on a proposed two-year spending plan now before lawmakers.
“It’ll give us a little more time to perfect it. But I think … we’ve got it about as good as we can,” he added.
— Reporting for Reuters by David Morgan; additional reporting by Tom Polansek in Chicago.
