What the Enacted Tax Bill Means for Ag Aviation

With President Trump’s signature, the biggest reform to the U.S. tax code in over 30 years is now in place. The new tax statute contains many provisions beneficial to small business, and ag aircraft operations. 

Lower Tax Rates

New Corporate Tax Rate

The biggest boon to businesses, large and small, is the cutting of the corporate tax rate. The corporate tax rate will be cut from 35 percent to 21 percent starting Jan. 1, 2018. Personal service corporations would be subject to a flat 25 percent corporate tax rate subject to limitations on the amount of income qualifying for the special rate.

 

President Trump originally wanted 15 percent, but a cut of that size would leave no room to cut taxes anywhere else. The bills passed by the House and Senate called for a 20 percent rate, and the 21 percent rate in this bill allows space for some other deductions to be maintained.

 

Personal Income Taxes

The final bill retains the seven different tax brackets, lowering the tax rate in each bracket overall and doubling the standard deduction from $6,500 for individuals and $13,000 for families to $12,000 and $24,000, respectively.

 

However, the lowering of the overall rates and increase of the standard deduction means some tradeoffs with other deductions. The deduction of state and local property taxes will be capped at $10,000. The mortgages interest deduction will be capped at $750,000 under the new law, down from the current $1 million cap. Student loan interest will continue to be deductible, and graduate-student tuition waivers will not be considered taxable income. 

 

Estate Tax

The estate tax exemption is doubled from $5 million to $10 million for estates passed on between Dec. 31, 2017, and Jan. 1, 2026. This is an important exemption for the next generation of farmers and ag aviation operations who would otherwise need to sell off land or expensive equipment to cover estate taxes.

Cost Recovery

The taxpayer has the option of using the Section 179 deduction and should the taxpayer exceed that limit, bonus depreciation kicks in. The taxpayer may also just solely use bonus deprecation.

 

The law allows the additional first-year depreciation deduction for both new and used property. The provision generally applies to property placed in service after Sept. 27, 2017.  In addition, the law follows the phase-down of bonus depreciation to property acquired before Sept. 28, 2017, and placed in service after Sept. 27, 2017.

 

Temporary 100-percent Expensing for Certain Business Assets

The bill extends and modifies the additional first-year 100-percent depreciation deduction through 2026 (through 2027 for longer production period property and certain aircraft). What was a 50-percent allowance is increased to 100 percent for property acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2023.

 

Thus, the bill follows the present-law phasedown of bonus depreciation for property acquired before Sept. 28, 2017, and placed in service after Sept. 27, 2017. The 100-percent allowance is phased down by 20 percent per calendar year for property placed in service.

 

Expand the Section 179 Deduction and Bonus Depreciation

The maximum amount an individual can deduct for new asset purchases, like an ag aircraft, tractor or combine, would be raised to $1 million, up from $500,000 under current law. The phaseout threshold is boosted to $2.5 million.

 

The provision also expands the definition of qualified real property eligible for section 179 expensing to include any of the following improvements to nonresidential real property placed in service after the date such property was first placed in service: roofs; heating, ventilation and air-conditioning property; fire protection and alarm systems; and security systems.  This provision applies to property placed in service after Dec. 31, 2017.

EPA to Consider Revising Certain Specifics of WPS and Pesticide C&T Rules

The EPA recently announced it will initiate a rulemaking process to revise certain aspects of the Worker Protection Standard (WPS) and the Certification and Training (C&T) Rule. The EPA expects to publish a Notice of Proposed Rulemaking to solicit public input on proposed revisions to the WPS requirements for minimum age, designated representatives and application exclusion zones. In regard to C&T, the EPA expects to publish a Notice of Proposed Rulemaking to solicit public input to revise the minimum age requirements. For both WPS and C&T, Notices of Proposed Rulemaking are expected by the end of FY2018.

 

The EPA revised the WPS on Nov. 2, 2015. Most of these revisions became effective on Jan. 2, 2017; the remainder go into effect on Jan. 2, 2018. The effective date for the new C&T Rules has been extended to May 22, 2018. The EPA does not intend to extend the implementation or compliance dates for either WPS or C&T despite the revision process.

 

For the three WPS requirements being revised, the first relates to the minimum age for being a pesticide handler. The 2015 revision prohibits anyone under the age of 18 working for a commercial applicator from being a pesticide handler or doing any kind of early-entry work during the restricted-entry interval. A pesticide handler is defined in the WPS as any employee who does any of the following pesticide related activities: handling, mixing, loading, cleaning, transferring, applying, disposing, acting as a flagger, adjusting or repairing equipment used for pesticides, performing tasks as a crop advisor during application or REI. Relatives may be hired as pesticide handlers if they are 16 years or older for non-commercial applicators.

 

The C&T requirement being considered for revision is related to the WPS rule on the age restriction. The current C&T Rule establishes a minimum age of 18 for private and commercial pesticide applicators. It also establishes a minimum age of 18 for noncertified applicators working under the direct supervision of a certified applicator. The only exception was for a minimum age of 16 for noncertified applicators working under the supervision of a certified private applicator who is a member of their immediate family. NAAA petitioned the Trump Administration to amend the rules to allow commercial applicators to hire workers under 18 years of age if they are properly certified.

 

The second WPS requirement up for revision deals with the designated representatives. The 2015 WPS required agricultural employers to provide pesticide application information and safety data sheets to a designated representative of a worker or handler. The representative had to be designated in writing by the worker or handler. This requirement to provide pesticide related information to the designated representative was in addition to the requirement that this information be provided to workers, handlers and medical personnel. Concern arose among the applicator community, including NAAA, that this designated representative situation might be abused by labor activists in an attempt to disgruntle farm employers, and hence should be adjusted.

 

The third WPS requirement up for revision is the application exclusion zone (AEZ). The AEZ was intended to be “buffer zone” that traveled with the application equipment, as opposed to a traditional buffer zone that is related to the field boundaries. If any person, whether they had anything to do with the application or not, entered the zone, the applicator would be required to cease applications until the person was clear of the AEZ. Aerial applications would be required to maintain a 100-foot AEZ if the requirement is not revised regardless of wind direction and the intention of people intentionally attempting to prevent an application.

 

NAAA has previously submitted comments opposing the requirements that are now up for revision. The requirements impose unnecessary burdens on applicators and can be used by environmental activists and others to disrupt applications and other agricultural operations. NAAA is pleased the EPA is opening these requirements up for further comment from the regulated community. NAAA will continue to keep you up to date on these revisions and our comments to the EPA.

Trump Signs National Defense Authorization Act, Reinstating UAV Registration Requirements

President Trump has signed the National Defense Authorization Act (NDAA), a $700 billion defense bill containing a provision restoring the FAA’s registration rules for small unmanned aerial systems (sUAS).

 

The previous registration rules for sUAS were struck down last May by a federal court because the court determined the registration requirements violated the 2012 FAA Modernization and Reform Act, which states the FAA “may not promulgate any rule or regulation regarding a model aircraft.” However, the court added Congress was “always free to repeal or amend” the 2012 prohibition on the FAA’s model aircraft rules. Congress, via the NDAA, heard the court and amended the 2012 law by restoring the sUAS registration requirements.

 

There should now be significantly more staying power in sUAS registration requirements, because instead of simply an FAA rule, it is now enshrined into law.

 

A small UAS is defined as weighing less than 55 pounds, but more than 0.55 pounds. More than 770,000 sUAS were registered before the old rule was struck down.

 

NAAA has long been advocating for the safe integration of UAS into the national airspace to protect manned aircraft. In addition to UAS registration requirements, NAAA has promoted the installation of an Automatic Dependent Surveillance-Broadcast (ADS-B) Out technology on all UAS, visible strobe lighting, rigorous training for UAS pilots and requiring all UAS to get an airworthiness certificate from the FAA.

 

NAAA also developed a checklist for low-level aviators should they have an encounter with a UAS.

NTSB: UAV Operator at Fault in Black Hawk Collision

The NTSB has concluded the operator of a UAV that crashed into an Army helicopter over Staten Island in September intentionally flew the drone out of visual range and lacked in-depth knowledge of regulations governing its use. 

 

The small unmanned aircraft was destroyed, and the Army helicopter sustained a scuffed fuselage and rotor blade damage. Debris from the UAS were also found in the helicopter’s oil cooler. The damaged rotor blades were swapped out, and the Black Hawk was put back into service the next day.

 

According to the NTSB, the operator flew the device 2.5 miles away with only a map on his tablet as a guide. While the operator said he was aware of the 400-foot altitude limit, logs showed earlier that day he had flown the UAS to a height of 547 feet at nearly 2 miles away. The NTSB board concluded that distance was “unlikely to be within visual line of sight.”

 

The pilot claims he was unaware his UAS had crashed until NTSB investigators contacted him.

 

The Black Hawk, part of the 82nd Airborne Division based in Fort Bragg, N.C., was in New York providing support for the U.N. General Assembly. Army officials believe this is the first time an incident like this has happened.

 

This incident underscores NAAA’s efforts to increase UAS safety by urging federal regulators to require all UAS be equipped with visible strobe lights and ADS-B out or LATAS (Low Altitude Tracking and Avoidance)-like tracking technology so they can be easily located by manned aircraft. NAAA has also created a checklist if you have an encounter with an unmanned aircraft.

NAAA Ag Aviation Expo Photos Available for Purchase

The 2017 Ag Aviation Expo was great fun for the young and young at heart.

Hundreds of photos from the 2017 NAAA Ag Aviation Expo in Savannah, Ga., are available for viewing and purchase from NAAA’s official convention photographer, Randy Thompson Photography. An online gallery for has been set up at RandyThompsonPhotos.com where photos can be purchased individually for $8 per download. The best way to shop is to register for a free account for Randy Thompson Photography. Registration allows you to access past orders, save sets of favorite photos and items in your shopping cart, and checkout faster. Visit RandyThompsonPhotos.com and click on the “NAAA Savannah 2017” photo gallery to get started.

 

Please contact Randy Thompson at (912) 398-2093 if you encounter any issues completing your images purchases.
 

 

New Items! Shop NAAA Today

After much anticipation, NAAA has launched our online store. It will be your one-stop shop for NAAA branded merchandise to show your pride for the association, and we’ve got something for everyone. 

NAAA's online store gives members access to a wide range of NAAA branded clothing and accessories including jackets, t-shirts, hats, drinkware, and much, much more. Members will also be able to purchase gift certificates for birthdays, holidays and special occasions. 

The store will be available year-round and members can sign-up for latest product arrival notifications, pre-order new items and have access to exclusive offers as we continue to expand the store and offer a more diverse selection of accessories and apparel. The NAAA Support Fundraising Committee will continue to provide items for sale at the NAAA Ag Aviation Expo in December.

Dominique Youakim, NAAA President said, "I'm delighted with the new online store because not only are we now making available high-quality merchandise for those in the industry, but we are promoting our professional industry and association to the public with the NAAA brand.”

Show your pride and support NAAA by going online today at https://Shop.AgAviation.org and purchase your NAAA merchandise. 

If you have any questions regarding the items, you can email shop@agaviation.org or call us at 202.546.5722

Renew Your NAAA Membership Before the New Year!

Once you renew your membership, you can take advantage of NAAA’s new Recruit-Rebate-Rewards Program where you can receive a 10% rebate for recruiting new members to join the NAAA. Click here for more details so you can start referring and earning today!

NAAA membership is as important as ever as NAAA needs resources to continue pushing for stringent tower-marking requirements and to promote the safe integration of UAVs into the national airspace system (NAS) to ensure the safety of ag pilots (click here to view NAAA’s UAV safety campaign video). Similarly, NAAA has worked hard to make sure EPA and manufacturers register crop protection products with labels allowing aerial use.

NAAA continues to advocate daily on these and other important issues for the safety and continuity of the aerial application industry. An NAAA membership comes with numerous benefits whether you’re an operator, pilot or allied company. Take a look at this infographic to see why your membership matters:

Online Renewal Instructions

You can renew your membership at AgAviation.org by logging into your account in the upper right hand corner. Once you’ve logged in, click Membership Renewal on the left-hand toolbar (as seen in the graphic below).

 

Auto Renewal Information

NAAA offers auto renewal for membership and NAAREF donations. When you sign up for auto renewal, NAAA will automatically charge the credit card on file every Sept. 1. There are four ways to sign up for auto renewal:

1. When you receive your renewal statement in September, mark the box in the payment area for auto renewal.
2. Renew your membership online and you’ll be asked during the process if you’d like auto renewal.
3. Call the NAAA office at (202) 546-5722 and request auto renewal.
4. Return the membership form in the next Agricultural Aviation magazine and mark the box in the payment area for auto renewal.

How Would You Rate the 2017 NAAA Ag Aviation Expo? Please Tell Us by Jan 5!

Thank you to the attendees and exhibitors for joining us for the 2017 NAAA Ag Aviation Expo in Savannah earlier this month.

 

We are continually working to improve our educational sessions, networking, trade show and the programs/services offered to attendees. If you have not already done so, please click on the following link and complete the short survey so that we have substantive input to help us continue to improve future Ag Aviation Expos. Please complete the survey by Jan. 5, 2018.

• Attendee survey: www.surveymonkey.com/r/2017NAAAAttendeeSurvey
• Exhibitor Survey: www.surveymonkey.com/r/2017ExpoExhibitor

All responses are anonymous, but if you wish to share further details, please contact Lindsay Barber, NAAA’s Director, Meetings, Marketing & Special Projects. Thank you for taking the time out of your schedule to complete this important survey and we look forward to seeing you Dec. 3-6, 2018, in Reno, Nev.

Worthy Ag Aviation Organizations to Contribute to and Earn a Tax Write-off

Perhaps you are looking for worthy charities to make your tax-deductible contributions to but are unsure which to choose. Remember that there are several great charities within our own industry.

 

The National Agricultural Aviation Research and Education Foundation (NAAREF) is a valuable part of our industry. NAAREF is the tax-deductible foundation that promotes and fosters research, technology, and educational opportunities benefitting the aerial application industry. NAAREF is responsible for several great programs such as PAASS, Operation S.A.F.E., Compaass Rose and “Ask the Expert” Speed Mentoring Sessions.

 

PAASS is the premier safety and educational program offered to attendees at state and regional conventions throughout the country. This season’s 2017-2018 presentations represent the 20^th Anniversary of programs and has been responsible for a decrease in pilot accidents and chemical drift incidents since its inception. The oversight of Operation S.A.F.E. was transferred to NAAREF in 2003 after it was created by the NAAA in 1981. Operation S.A.F.E. clinics use trained analysts and state-of-the-art electronic equipment to evaluate the application pattern while minimizing drift outside of the target field. Compaass Rose is a program developed in 2002 to educate new pilots in the aerial application industry about personnel, practices and equipment used in aerial application. Compaass Rose was joined in 2013 at the NAAA National Convention by “Ask the Expert” Speed Mentoring Sessions with the same goal.

 

Donations can be made to NAAREF by sending them to NAAREF, 1440 Duke Street, Alexandria, VA 22314 or by completing the online NAAREF Donation Form by clicking the “Donate NAAREF” icon on the NAAREF information page.

 

Another worthwhile project worthy of your support is the National Agricultural Aviation Museum (NAAM) which is part of the Mississippi Agriculture and Forestry Museum in Jackson, Miss. NAAM houses exhibits highlighting the history of aerial application through modern times. The museum is a favorite of travelers as they pass through the area. NAAM also houses the National Agricultural Aviation Hall of Fame which commemorates individuals that have contributed to equipment and technology to make agricultural aviation what it is today.

 

The Mississippi Agriculture and Forestry Museum is embarking on a project to renovate the museum to more modern and interactive displays to make the content even more attractive to youth and adults alike. Instructions for donating to the museum can be found on their web site by clicking here.  

NAAA and NAAREF Board Meetings Feb. 16-17

We look forward to seeing you Feb. 16-17 at the NAAA and NAAREF Board Meetings, with a couple of meetings beginning on Feb. 15. All meetings are open to NAAA members. We will be back at the Hilton Old Town Alexandria for our meetings. The hotel is across the street from the King Street Metro stop (take either Blue or Yellow Line), which is the second stop south of Ronald Regan National Airport (DCA). You can view a map of the metro system here.

You can view a tentative schedule here. Please email Lindsay Barber if you will plan to attend the meetings.
 
Hilton Old Town Alexandria, 1767 King St., Alexandria, VA 22314
Rate: $148/night plus tax
 
Reservations: Call 1-800-HILTONS (mention NAAA Board Meeting) or make your reservation on-line here.
 
Room Block Closes: Jan. 19, 2018. Room rates will be higher after block closes and we cannot guarantee rooms after this date.