By Linda Jones McKee Originally Posted December 20th, 2017
Washington, D.C.—When the U.S. House of Representatives passed the Tax Cuts and Jobs Act for the second time this morning; it included unexpected last-minute wording that will benefit the owners of vineyards and orchards. Section 13201 of this bill allows “plants bearing fruits and nuts” to be fully depreciated in the year they are planted. The 100% depreciation will apply to “a plant which is planted or grafted after Sept. 27, 2017, and before Jan. 1, 2023.” That depreciation will then drop by 20% each year until Jan. 1, 2027, when the depreciation will be reduced to zero.
Previously, the depreciation for planting grapevines was 50% for the first year. This change should encourage grapegrowers to plant, replant or expand their vineyards, and it also will help reduce the financial impact of time it takes until grapes come into production.
The amendment that provides excise tax reductions for all wineries is buried in the approximately 1,000-page Tax Cuts and Jobs Act and did not receive much, if any, publicity prior to the bill’s passage. U.S. Sen. Rob Portman of Ohio added those tax provisions to the tax bill this past fall from another bill, the Craft Beverage Modernization and Tax Reform Act, that had been introduced into the Senate by U.S. Sen. Ron Wyden of Oregon in 2015.
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