American cattle raisers were recognized during negotiations for the One Big Beautiful Bill Act signed by President Donald Trump in July. Passage of the legislation includes provisions crucial to the longevity of our industry. Notably, it also excludes controversial measures like the sale of public lands or expanded eminent domain.
If you have done your own research on the bill, it’s possible there are some provisions you may not fully stand behind. However, the bulk of this legislation is beneficial to production agriculture and considered a win for the industry.
Before the bill was signed, the death tax exemption was set at $13.99 million per individual or $27.98 million per couple and set to expire Dec. 31. The new legislation permanently increases the death tax exemption to $15 million per individual or $30 million per couple, adjusted annually for inflation. The annual gift tax exclusion remains unchanged at $19,000 per giver per recipient.
This means beginning Jan. 1, if the value of your ranch plus equipment, cattle and other assets is less than $15 million individually or $30 million jointly, you will pay no death tax. In the past, this requirement has forced cattle raisers to sell off generational land, equipment or cattle to make the payment. Texas & Southwestern Cattle Raisers Association supports fully eliminating the death tax, but until then, this increased threshold is a victory.
The small business tax deduction, also known as a qualified business income deduction, is made permanent at 20% by this bill. Section 199A allows small businesses, like ranches, to deduct 20% of business income, helping us save more of our hard-earned dollars.
The Immediate Expensing of New Business Assets, Section 179, allows small businesses to deduct the cost of equipment, rather than depreciate, on qualifying property. Thanks to the One Big Beautiful Bill Act, cattle raisers will now be able to deduct up to $2.5 million in qualified equipment expenses. The phaseout threshold for this deduction is increased to $4 million and these limits will be adjusted annually for inflation.
Bonus depreciation allows small business owners to deduct the cost of equipment in the year of purchase, rather than deduct depreciation over several years. Under this bill, 100% bonus depreciation is made permanent, beginning Jan. 19, for depreciable property like machinery.
In addition, disaster-related casualty loss was amended to permanently extend itemized deductions for personal casualty losses resulting from federally declared disasters such as fires, storms or theft. This is an extension of the Federal Disaster Tax Relief Act enacted December 2024.
The 2018 Farm Bill, officially known as the Agriculture Improvement Act of 2018, was extended through September as part of the American Relief Act of 2025. However, the One Big Beautiful Bill offered some farm bill provisions for cattle raisers ahead of the expiration.
The legislation increased to two monthly payments for the Livestock Forage Disaster Program and allows payments to start after four consecutive weeks of drought, rather than the previous eight consecutive weeks.
The bill also funds indemnity payments through the Livestock Indemnity Program at 100% of the market value for livestock losses due to predation and 75% of market value for losses due to adverse weather. Additionally, payments will be made for the loss of unborn livestock.
Funding for several voluntary conservation programs has also been secured for the next six years, including $18.5 billion for the Environmental Quality Incentives Program; $8.1 billion for the Conservation Stewardship Program; $4.1 billion for the Agricultural Conservation Easement Program; and $2.7 billion for the Regional Conservation Partnership Program.
The bill also increases annual funding for animal disease prevention and cattle health to $233 million per year. This funding goes toward the three-legged stool programs supported by Texas & Southwestern Cattle Raisers Association, including: $153 million per year for the National Animal Vaccine and Veterinary Countermeasures Bank, which houses the foot-and-mouth disease vaccine and test kits; $70 million for the National Animal Health Laboratory Network; and $10 million per year for the National Animal Disease Preparedness and Response Program.
While no piece of legislation is perfect, the One Big Beautiful Bill represents a significant step forward for those of us in production agriculture.
These changes help preserve the legacy of ranching families and give us more tools to remain resilient in an ever-changing economic and environmental landscape. It’s important that we stay engaged, informed and unified as we continue advocating for policies that protect and strengthen our livelihoods.
