The Wolfson Centre for Bulk Solids Handling Technology CimbriaPort of StocktonPort of South LouisianaCleveland Cascades LtdMultimodal 2022
  • TBA Group
  • Cleveland Cascades Ltd
  • Multimodal 2022
  • Port of Stockton
  • The Wolfson Centre for Bulk Solids Handling Technology
  • Sailors Society

NGFA urges IRS rules clarity

NGFA urges IRS rules clarity

(Posted on 24/10/18)

The National Grain and Feed Association (NGFA) in the USA has testified at an Internal Revenue Service (IRS) public hearing to recommend that the agency clarify a recently proposed rule to ensure agribusiness firms like grain elevators qualify for the 20 percent pass-through deduction under Section 199A of the tax code.

The National Grain and Feed Association, founded in 1896, is a broad-based, non-profit trade association that represents and provides services for grain, feed and related commercial businesses. Its activities focus on enhancing the growth and economic performance of U.S. agriculture.

Earlier this year, the NGFA and other stakeholders raised considerable concerns about how an initial version of Section 199A of the tax code – approved during the waning hours of congressional consideration of the Tax Cuts and Jobs Act of 2017 – would influence producer marketing decisions. Congress responded by including stakeholder-driven provisions to fix the so-called “grain glitch” in the omnibus spending bill signed into law on 23rd March. The legislative solution achieved NGFA’s objective to replicate to the maximum extent possible tax benefits to cooperatives and producers under the previous Section 199, while at the same time preserving a competitive marketplace.

On Aug. 16, the IRS published a proposed rule to implement certain provisions of Section 199A. Importantly, while the proposal has no impact on the legislative action taken by Congress in March, it does contain a provision regarding the deduction for qualified business income under Section 199A that the NGFA told the IRS needs to be clarified or revised.

The IRS-proposed rule would not affect taxpayers and entities organized as C corporations. However, it could be interpreted as excluding other entities – such as individuals, partnerships, sole proprietorships, S corporations and LLCs whose owners are individuals – that are defined by the IRS as “dealing in commodities” from deducting 20 percent of qualified business income from their taxes under Section 199A. 

The NGFA noted the proposed rule does not classify as “dealing in commodities” such businesses as feed mills, flour mills, and grain and oilseed processing plants that transform raw commodities into animal feed or processed products. Likewise, the proposed rule acknowledges that engaging in hedging transactions as part of the trade or business of manufacturing or farming is not classified as “dealing in commodities.” 

But as currently written, the NGFA said, the proposed rule could ensnare grain elevators and other businesses that receive, store and ship raw agricultural commodities without altering their physical state.

“The NGFA urges (that the proposed regulations) be modified to clarify and confirm that (companies whose facilities) take physical possession of commodities are expressly excluded from the definition of ‘dealing in commodities,’” said Chris Hesse, principal in the national tax office of CliftonLarsonAllen, an associate member of the NGFA who testified on the association’s behalf. “The (dealing in commodities) provision should apply only to the dealing in financial instruments – not taking physical possession (of the underlying commodities).”

Latest News

First ore delivered at Rio Tinto Gudai-Darri mine in the Pilbara

(Posted on 20/06/22)

Rio Tinto has delivered first ore from the Gudai-Darri iron ore mine as the company brings online its... Read more


British Steel pressing ahead with £26 million investment

(Posted on 20/06/22)

British Steel has been given planning approval for a £26 million upgrade to its Special Profiles... Read more


Trafigura strong in testing times

(Posted on 12/06/22)

Trafigura Group Pte. Ltd, a market leader in the global commodities industry, released its half year... Read more


MoU to study using Rio Tinto iron ore in green steelmaking

(Posted on 08/06/22)

Rio Tinto and the Salzgitter Group have signed a Memorandum of Understanding (MOU) to work together... Read more


Bunge surpasses South American non-deforestation and sustainability targets

(Posted on 03/06/22)

Bunge has announced that it has exceeded its non-deforestation targets for monitoring and traceability... Read more


British Steel launches green hydrogen feasibility study

(Posted on 31/05/22)

British Steel is conducting a major study into the use of green hydrogen in the company’s drive... Read more


Trafigura makes further commitment to First Movers Coalition

(Posted on 25/05/22)

Trafigura Group Pte Ltd., a market leader in the global commodities industry, has made a new commitment... Read more


BHP inaugurates a new copper concentrator in Spence

(Posted on 18/05/22)

BHP CEO Mike Henry has led the opening of Spence's new copper concentrator plant.The project required... Read more


Schenck Process announces mining business sale to Sandvik

(Posted on 12/05/22)

Schenck Process, a global company for sustainable, integrated measuring and process technology solutions... Read more


BHP completes the divestment of its BMC interest

(Posted on 05/05/22)

BHP has completed the sale of its 80 per cent interest in BHP Mitsui Coal (BMC) to Stanmore SMC Holdings... Read more


TBA GroupViganVan AalstBühler GmbHSailors SocietyTOC Events
  • Vigan
  • Van Aalst
  • Telestack

Subscribe to our newsletter

Keep up to date with the latest global news in bulk cargo handling and shipping