• Home
  • News
    • Politics & Government
    • Business & Economy
    • Crime / Courts
    • Health / Medicine
  • Sports
    • High School Sports
    • Radio Iowa Poll
  • Affiliates
    • Affiliate Support Page
  • Contact Us
    • Reporters

Radio Iowa

Iowa's Radio News Network

You are here: Home / Agriculture / Court ruling impacts CRP payments

Court ruling impacts CRP payments

June 26, 2013 By Radio Iowa Contributor

The U.S. Tax Court has ruled Conservation Reserve Program payments don’t equate to cash rent, which means self-employment taxes must be paid on that income. Roger McEowen, director of the Iowa Center for Ag Law and Taxation, says the ruling has huge consequences for farmland investors and retired farmers who don’t collect Social Security benefits, because they’re now liable for taxes on CRP.

“They’re going to have to pay self-employment tax on those CRP rents, so that’s a big implication,” McEowen says. “The other big implication is, if the court’s language is broad enough, it would seemingly apply to other types of government contracts, such as urban housing, those type of things.”

McEowen says the ruling also means the government will pay out more in CRP payments and then collect it back with the self-employment tax and won’t come out ahead in terms of revenue generated. He says bids will be hiked in the CRP application process.

“If I know I’m going to have to pay an additional 15.3% on my CRP income, I’m going to increase my bid by at least that much,” he says. “If the government thinks they’re going to collect more revenue out of this, I doubt it. What’s going to happen long term is, they’re going to have to dole out more in CRP payments because landowners will just incorporate that additional tax into the bid amount.”

McEowen says it may take up to $35,000 just to appeal the tax ruling to the 8th Circuit Court of Appeals. He says it’ll likely take a coalition of ag groups, conservation groups and lenders banding together to raise the funds to make the appeal.

By Jerry Oster, WNAX, Yankton

Share this:

  • Facebook
  • Twitter

Filed Under: Agriculture, News Tagged With: Taxes

Featured Stories

Governor signs child care expansion into law

Iowa seniors have until July 1 to apply for new property tax break

Smoke from distant fires creates colorful sunrise in Iowa

DOT’s Motor Vehicle Enforcement Division to merge into State Patrol

Iowa’s governor approves liability limits for trucking industry

TwitterFacebook
Tweets by RadioIowa

Iowa AD Gary Barta announces retirement

Iowa to visit Creighton in Gavitt Tipoff Games

Iowa and Indiana collide Thursday at B1G baseball tournament

Former Hawkeye joins Lisa Bluder’s staff at Iowa

Iowa rolls in B1G Tournament opener

More Sports

Archives

Copyright © 2023 ยท Learfield News & Ag, LLC