After months of speculation, the U.S. House of Representatives has unveiled a wide-ranging tax and spending package. While still in the proposal stage, the legislation includes several provisions that could significantly affect the agricultural industry — from expanded depreciation to changes in estate tax exemptions.

Pinion tax advisors have reviewed the proposal to identify what matters most for ag producers, family farms, and agribusiness leaders. Below are key highlights.

Key Highlights for Agriculture

“This bill touches on several areas important to agribusiness, particularly around equipment investment, succession planning, and operational deductions,” says Keaton Dugan, agribusiness advisor at Pinion.

“If enacted, it could offer meaningful opportunities for growth and long-term planning across the ag sector.”

Overall, the bill provides relief from sunsetting tax provisions – predictability in tax policy is a win for farmers. The bill also provides some remarkable new benefits for new construction, and increases the qualified business income deduction.

  • Making Permanent the Qualified Business Income Deduction: The proposal would permanently extend the deduction for qualified business income and increase the deduction from 20% to 23%.
  • Permanently Extending Higher Estate and Gift Exemptions: The proposal permanently increases the estate and gift tax exclusion amount to $15M per person, beginning in 2026.
  • 100% Bonus Depreciation Through 2029: The bill extends 100% bonus depreciation for property (including fruit- and nut-bearing trees and vines) placed in service between January 20, 2025 and December 31, 2029. For property placed in service after 2029, the bonus depreciation percentage is zero.
  • Increased First-Year Expensing Limits: The bill would increase the Section 179 expensing limits, allowing a maximum deduction of $2.5M, with a phase-out limit of $4M.
  • Return of Research Expenditure Deductions: For tax years beginning after December 31, 2024 and before January 1, 2030, the bill permits taxpayers to elect to immediately deduct domestic research and experimentation expenditures.
  • Changes to the State and Local Tax (SALT) Deduction Cap: The proposed bill makes two big changes.
    • Increased Deduction Limit: The proposal increases the deduction limitation to $30,000 ($15,000 if MFS) for taxpayers with income below $400,000, with a phase-out down to the original $10,000 cap for high-income individuals.
    • Banning Deductibility of PTE Taxes: The proposal prevents the use of state elective pass-through entity taxes to deduct more than the new threshold by deducting those taxes at the entity level. Instead, those taxes must be passed out to owners and used in computing the owner’s personal deduction limitation.
  • Qualified Production Property Deduction: The proposal creates a new, bonus depreciation-like first-year depreciation deduction for nonresidential real property that constitutes an integral part of a manufacturing activity, refining activity, or agricultural or chemical production activity. The deduction is 100% of the cost of the property.
    • Targeted to New Construction: Construction must begin between January 20, 2025 and December 31, 2029, and property must be placed in service before January 1, 2033.
    • Purchased property, kind of? Qualified property may be purchased rather than constructed, but is only qualified if the property was not used in a qualified production activity by any person at any time between January 1, 2021 and May 12, 2025.

Next Steps

While the House’s tax bill lays groundwork for sweeping tax reform, there are significant hurdles to overcome before it moves to the Senate.

“Strong tax policy for agriculture doesn’t just benefit producers—it supports the entire rural economy. From equipment dealers to local banks, these provisions ripple through every corner of our communities.” Brian Kuehl, Director of Government and Public Affairs at Pinion.

“We have a narrow window to get this right. If we miss it, we risk losing momentum and leaving ag producers in limbo. Now is the time for Congress to deliver meaningful, lasting tax reform.”

Republican leaders are aiming to bring the bill to the floor for a vote as early as next week, however there are contentious elements that still need to be negotiated.

First, the House Budget Committee will work to consolidate its elements into a comprehensive package, followed by review from the House Rules Committee.

Speaker Mike Johnson has pushed to pass tax legislation by Memorial Day and the White House has expressed a desire to see passage by July 4. House Ways and Means Chair Jason Smith (R-Mo.) is less bullish on a quick timeline, saying that he would like to pass a bipartisan tax package before the end of the year.

Impacts on Other Industries

Pinion’s tax advisors have also provided an overview of how the proposed tax provisions will impact businesses in the manufacturing and biofuels industries, as well as other businesses:

Pinion’s government and public affairs team will continue to monitor the proposed bill and its potential impact on agricultural businesses.

Reach out to a Pinion advisor with questions or concerns around your business’ tax strategy.