Two major agricultural groups announced a proposal on Tuesday to roll back the Section 199A tax-break deduction that has upended grain trade. The National Grain and Feed Association and National Council of Farmer Cooperatives support a plan that would replace the 20% deduction on gross sales to cooperatives with a tax deduction more comparable to the original Section 199 deduction, known as the Domestic Production Activities Deduction.If approved by Congress, a farmer selling to a cooperative would still see a tax benefit over selling to a private company, but the tax break won't be as lucrative. The new tax provision also would be retroactive to Jan. 1, 2018, which would effectively nullify any significant tax savings farmers believe they were going to gain by exclusively selling to grain cooperatives. Under the draft legislation, the 20% gross sales language would be repealed and parts of the old Section 199 DPAD would be restored.Changes would be made to the farmer-level 20% deduction on qualified business income, which all non-corporate taxpayers received under the new tax law. Farmers who do businesses with cooperatives would see their 20% deduction reduced by either 9% of qualified income subject to such sales, or 50% of the farmer's wages allocable to such sales. The farmer would then add any pass-through from the co-op on the new Section 199 back in as a deduction. The total farmer-patron deduction would be the pass-through deduction from the cooperative, plus the modified 20% deduction.So the new change retains a benefit for selling to a cooperative, but it isn't simple.The draft language also notes that farms structured as a C corporation would not be eligible for the 20% pass-through deduction because of the language in the new law.