What This Bill Does
This bill changes how the federal government taxes certain payments made to farmers and ranchers. Specifically, it excludes certain farmer assistance payments from being counted as income that gets taxed.
Who It Affects
Farmers and ranchers who receive certain assistance payments, partnerships that include farmers or ranchers, and S corporations (a specific type of business structure) that operate farms or ranches.
Key Provisions
• Certain payments described in the American Rescue Plan Act of 2021 (a previous law) will not be counted as income for tax purposes for the person receiving them (Sec. 2)
• No deductions will be denied, no tax benefits will be reduced, and no basis increases (increases in the value of assets for tax purposes) will be denied because of the income exclusion (Sec. 2)
• For partnerships and S corporations receiving these payments, the excluded amounts will be treated as tax exempt income (Sec. 2)
• For partners in partnerships, the increase in their ownership interest value will equal their share of deductions from interest that is part of the payment plus their share of the principal (the main amount) that is part of the payment (Sec. 2)
What Changes
Farmers and ranchers will not have to pay income taxes on certain federal assistance payments they received. Partnerships and S corporations with farmer or rancher members will have different tax treatment rules for these payments.
Important Definitions
None defined in the bill text.
II
118TH CONGRESS
1ST SESSION
S. 93
To exclude from gross income certain assistance provided to farmers, and
for other purposes.
IN THE SENATE OF THE UNITED STATES
JANUARY 26, 2023
Mr. BOOKER (for himself, Ms. STABENOW, Mr. WARNOCK, and Ms. SMITH)
introduced the following bill; which was read twice and referred to the
Committee on Finance
A BILL
To exclude from gross income certain assistance provided
to farmers, and for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Family Farmer and
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Rancher Tax Fairness Act of 2023’’.
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SEC. 2. TAX TREATMENT OF CERTAIN ASSISTANCE TO
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FARMERS, ETC.
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For purposes of the Internal Revenue Code of 1986,
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in the case of any payment described in section 1006(e)
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of the American Rescue Plan Act of 2021 (as amended
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•S 93 IS
by section 22007 of Public Law 117–169) or section
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22006 of Public Law 117–169—
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(1) such payment shall not be included in the
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gross income of the person on whose behalf, or to
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whom, such payment is made,
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(2) no deduction shall be denied, no tax at-
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tribute shall be reduced, and no basis increase shall
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be denied, by reason of the exclusion from gross in-
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come provided by paragraph (1), and
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(3) in the case of a partnership or S corpora-
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tion on whose behalf, or to whom, such a payment
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is made—
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(A) any amount excluded from income by
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reason of paragraph (1) shall be treated as tax
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exempt income for purposes of sections 705 and
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1366 of such Code, and
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(B) except as provided by the Secretary of
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the Treasury (or the Secretary’s delegate), any
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increase in the adjusted basis of a partner’s in-
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terest in a partnership under section 705 of
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such Code with respect to any amount described
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in subparagraph (A) shall equal the partner’s
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distributive share of deductions resulting from
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interest that is part of such payment and the
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partner’s share, as determined under section
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752 of such Code, of principal that is part of
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such payment.
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Æ
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