Congress Considering Tax Relief and Other Jobs Creation Measures

With nationwide unemployment approaching 10 percent, Congressional leaders are considering whether to enact additional legislation to spur job creation.  Specifically, leaders are debating whether to include an extension of the $8,000 first-time homebuyer tax credit set to expire on November 30, 2009, and allow up to a 5-year carryback of net operating losses (NOL), among other provisions, such as a new tax credit for job creation, to legislation extending federal unemployment insurance currently pending in the Senate.  Both measures are supported by AGC and were included in the plan, Build Now for the Future, A Blueprint for Economic Growth. Extension of the $8,000 first-time homebuyer tax credit is gaining momentum in both the House and Senate, but consensus had not yet been reached on how long the tax credit should be extended and whether to remove the first-time homebuyer requirement.  In the Senate, proponents are seeking to extend the tax credit to all homebuyers and extend it until June 30, 2010, while also doubling the credit phase-out threshold to $150,000 for singles and $300,000 for couples.  Under debate is whether the offset the estimated $16.7 billion cost of the proposal.  Many in Congress consider this and other jobs creation measures to be emergency expenses that do not need to be paid for. The NOL provision would allow unprofitable companies to obtain immediate cash refunds on taxes they paid in previous years.  Current law allows companies to get refunds of taxes paid in the previous two years, or five years for smaller companies in 2008.  Proponents of NOL relief - including AGC - are seeking to extend the two-year period to five years for all companies for both 2008 and 2009 losses. AGC issued a statement today and sent a letter to Capitol Hill in support of these measures. Democratic leaders are also contemplating additional efforts to stimulate economic activity and have been meeting with economists to discuss recovery options.  These so-called "mini-jobs bills" could be enacted separately or attached to other jobs creation measures pending before Congress, such as the reauthorization of the surface transportation program.