ICBA state groups urge broad implementation of ACRE Act tax exclusion

ICBA and its affiliated state community banking associations called on the Treasury Department to ensure an ICBA-advocated tax exclusion passed under the One Big Beautiful Bill Act applies to as many agricultural loans as possible.

About the Policy: The ICBA-advocated Access to Credit for our Rural Economies (ACRE) Act policy that passed via the OBBBA creates a 25% exclusion for interest earned on loans secured by agricultural and ranch land. The ACRE Act exclusion—long sought by ICBA—was enacted under Section 139L of the OBBBA.

Broad Interpretation Needed: In a joint letter, ICBA and the state groups urged the Treasury Department to take a broad interpretation of loans used to acquire rural and agricultural real estate, including any loan secured by such real estate. An unreasonably narrow interpretation of Section 139L would shortchange the potential of the OBBBA, they said.

Loan Examples: For instance, the groups said operating and equipment loans, real estate as a secondary source of collateral, loans partially secured by real estate, loans secured by rural and agricultural real estate that includes a dwelling, loans to fund agricultural land improvements, and loans guaranteed by the USDA are among those that should qualify.

ICBA Resource: ICBA offers a briefing document outlining the key community banking provisions of the OBBBA budget reconciliation package (H.R. 1). The briefing paper includes an outline of new tax-advantaged Trump Accounts for children under 18, breaks down the law’s extension of expiring tax provisions, and more.

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