Construction and energy groups are hopeful that, this fall, Congress will pass a bill to extend popular tax credits through the end of 2016.
The Senate Finance Committee on July 21 easily approved a $95-billion package of “extenders.” But further action is unlikely before lawmakers begin their August recess.
Over the past several years, Congress has dealt with tax-break extensions in the final weeks, or even days, of the year. The Finance Committee’s action in July is a good sign, says Liam Donovan, the Associated Builders & Contractors director of political and government affairs. “It sends a clear signal to the business community that these extensions will not go away,” Donovan says.
Some of the incentives that contractors support and rely on are credits for research, as well as bonus depreciation and Section 179 expensing for capital goods purchases. “It’s hard to do Section 179 retroactively,” he says.
In the House, the Ways and Means Committee took a different approach, approving, on Feb. 4, bills that would make seven of the most popular breaks permanent.
Finance Committee Chairman Orrin Hatch (R-Utah) at his panel’s July 21 session said he would like to see a Senate counterpart to the Ways and Means bills. But he added, “To ensure that we can more quickly provide much needed relief to taxpayers, I’ve agreed to defer litigating the issue of permanence until a later time.”
Sen. Ron Wyden (Ore.), Finance’s top Democrat, said he is hoping for quick floor action on the committee’s extenders bill. Wyden added that he wants to work with House members “to get this legislation to the president’s desk as soon as possible” so that he and other lawmakers can work on comprehensive tax reform.
The Finance Committee’s package includes an extension of the production tax credit for wind-energy projects but not for the investment tax credit for solar projects. James Hewett, American Council on Renewable Energy senior policy director, says if the wind-project credit lapses, “we’re going to be looking at about a 73% drop in new installations after 2016.”
Donovan and Hewett say they expect the extenders bill to be attached to a larger, bipartisan “must-pass” piece of legislation in the fall.
Tax 'Extenders" Could See Floor Action This Fall