American Farm Bureau Federation reports:
Congress should swiftly approve the Revitalizing Under-developed Rural Areas and Lands (RURAL) Act (H.R. 2147, S. 1032), according to the American Farm Bureau Federation. The recently introduced legislation will ensure that electric cooperatives will not jeopardize their tax-exempt status when they accept government grants for activities like expanding broadband or restoring power after storms and disasters.
Most electric cooperatives are tax-exempt organizations that must receive at least 85% of their income from members to maintain their tax-exempt status. However, an unintended consequence of the Tax
Cuts and Jobs Act, which re-characterized grants as income, is making it harder for cooperatives to meet the tax-exempt test.
“Farm Bureau works hand-in-hand with rural electric cooperatives on the shared goal of ensuring that rural America and the farmers and ranchers who live there have access to reliable power and high-speed internet. We encourage lawmakers to act quickly on this important measure to allow rural electric cooperatives to continue their critical work without risking their tax-exempt status,” said AFBF President Zippy Duvall.