House's bonus depreciation rules: What they mean for fruits
When the Ways and Means Committee sent聽the House a measure to make permanent extra-generous tax subsidies for firms that purchase capital equipment, I聽聽that the bill included a provision extending 鈥渂onus depreciation鈥� rules to fruit and nut trees.
If I had read聽聽more carefully, I would have noticed that while it applied to fruit that grows on trees and vines, it inexplicably excluded fruit that grows on bushes. As a blueberry lover, I am shocked and outraged.
This job-killing exclusion also extends to raspberries鈥攂oth black and red. Cranberries are more complicated. They usually grow on a bush, but sometimes a vine. So eligibility for the special tax break may depend on the variety of cranberry we are talking about.
I suspect the bill has tax lawyers scrambling to find the broadest possible definition of tree. After all, there must be some bright-eyed legal associate out there who can make the case that a bush is nothing more than a short tree. Or a fat vine.
Kudos to Bloomberg BNA鈥檚 Marc Heller for describing this foolishness. Marc聽聽that the fruit and nut amendment was added by Rep. Devin Nunes (R-CA), whose district includes growers of apricots, grapes, and almonds. But not, apparently,聽blueberries.聽Marc also noted that Michigan, the home state of Ways and Means chair Dave Camp, is a major producer of those blown-off blueberries.
This may prove that Camp, whose tax reform plan would scrap bonus depreciation entirely in return for lower tax rates, is no hypocrite. Alternatively, after announcing his retirement, he may simply have lost interest in adding home-state goodies to the tax law.
Nunes鈥� own views about depreciation may be a bit more nuanced than his berry-busting bill implies. When not helping his district鈥檚聽growers harvest tax breaks, he backs his own broad-based reform plan鈥揳聽聽that would allow all firms to fully expense all investment costs in the year property is acquired.
In such a system, of course, there would be no special rules for fruit trees. And no reason why a farmer would need to consult a tax lawyer before deciding whether to grow blueberries or apples.
This, of course, is the problem with the current code. It is filled with examples of government picking winners and losers, even to the point of providing economic advantage to one fruit over another.
In this case, at least, critics are literally correct to say that tax breaks grow on trees. And vines. But not bushes.
