August 5, 2021

Written by: Daniel Smith, Cooperative Network President & CEO

Over the past year and a half, our cooperative members and the communities they provide with essential goods and services have struggled to overcome the health, economic and social impacts caused by the COVID-19 pandemic. Cooperative Network has worked diligently to help our cooperative members across Minnesota and Wisconsin overcome these challenges – and face the uncertainty – caused by the pandemic. While we have made great progress, this work continues daily and is far from complete.

The harsh reality is that our local economies continue to face unprecedented challenges and hardships. Rising inflation, workforce shortages, supply chain disruptions and increased costs, combined with the uncertainty of the times, make operating a business in the current environment a tremendous challenge.

This is why Cooperative Network opposes increased taxes on small businesses and farms, in particular the proposed elimination of “stepped-up in basis,” a tax provision that has been in place for over a century, and has helped thousands of family-owned businesses and farms limit their tax liability and pass their operations down to the next generation.

Removal of this provision could effectively force the sale of family farms and businesses in order to pay the tax bill.

Stepped-up in basis means that someone who inherits an asset, estate or trust – including a family farm or business – does not have to pay capital gains taxes on any increase in value or appreciation that occurs under the previous owner. This provision needs to remain in place and current efforts which would result in catastrophic tax bills placed on past, present and future asset transactions must be defeated.

Cooperative Network serves as the Voice of Cooperatives and represents more than 200 cooperatives from a dozen business sectors. All of our members rely on a strong rural economy and vibrant communities. The ability to pass family-owned businesses and farms down to the next generation without a catastrophic tax burden has served our nation well. It is essential that it continue.