Coalition Letter on Fixing the “Grain Glitch” in Omnibus Spending Package

By at 21 March, 2018, 8:49 am

The Honorable Mitch McConnell

Majority Leader

United States Senate

Washington, D.C.  20510


The Honorable Paul Ryan

Speaker of the House of Representatives

Unites States House of Representatives

Washington, D.C. 20515


Dear Leader McConnell and Speaker Ryan:

The “Tax Cuts and Jobs Act” was an important legislative victory that is freeing up more capital for entrepreneurs, families and businesses of all sizes. Tax relief is fueling economic growth and many Americans are experiencing significant benefits, which has made a big difference on their outlook for the future. As supporters of tax relief and reform, our organizations will continue to promote how this historic legislation is driving economic growth and more opportunities for Americans who have struggled during the past decade or more.

A drafting error in the new law, however, must be fixed in order to sustain the positive outcomes that are being documented with each passing week. Specifically, this error produced the “grain glitch,” a new loophole created by the law. The error must be addressed quickly to ensure its damaging effects are contained and not allowed to spiral out of control. This new, farm co-op loophole is producing great uncertainty and has the potential to harm many small and independent businesses. In addition, some businesses are spending thousands of dollars to become co-ops so they can benefit from the loophole. Others are anxiously waiting, and hoping, for Congress to provide a solution. Certainty must be restored.

The “Tax Cuts and Jobs Act” vastly curtailed favoritism in the tax code – that is, the picking of winners and losers – but the “grain glitch” produces a new class of winners. It is distorting business decision-making in a negative way. The effects of the error could ripple across industries thereby harming the success of the tax package, while undermining the positive reception it is receiving from the public.

The undersigned groups urge you to fix the glitch by restoring tax-treatment equalization for selling to co-ops and to independent businesses. This “glitch” can be fixed in the pending omnibus bill, whereby a speedy resolution would restore certainty for businesses and the agriculture industry.

Thank you for your leadership.


Karen Kerrigan, President & CEO

Small Business & Entrepreneurship Council


Rick Manning, President

American for Limited Government


Andrew F. Quinlan, President

Center for Freedom and Prosperity


Norm Singleton, President

Campaign for Liberty

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