Sens. Roberts (R-Kan.), Klobuchar (D-Minn.) and Tester (D-Mont.) recently introduced the Agriculture Equipment and Machinery Depreciation Act (S. 1422) to help farmers purchase new equipment and replace worn-out machinery.

The bill would amend the U.S. tax code to permanently set a five-year depreciation schedule for certain agricultural equipment. The current tax code sets a seven-year depreciation cost recovery period for agricultural equipment.

Changing the depreciation schedule for agricultural equipment to five years would make the tax code more consistent and support rural development by aligning the length of time that farmers can take a depreciation deduction with the average useful life of that property.

Under the tax code, taxpayers are allowed a depreciation deduction to allow them to recover the costs of investing in certain property, like farm machinery and farm-use motor vehicles. The recovery period for the deduction should match the useful life and financing of that property.

According to surveys from the USDA's Farm Service Agency, on average farmers and ranchers finance farm equipment and machinery for five years.