Expired Tax Provisions Begin Renewal Process

Finance Committee Chairman Ron Wyden (D-Ore.) is planning to mark up a package of recently expired business tax provisions known as “extenders” on April 2. Chairman Wyden has said he would like to move the package as a whole, while Ranking Member Orrin Hatch (R-Utah) said he may want to cull the package down. A one-year extension is reportedly projected to cost $45–$50 billion in federal revenue. It is unclear at this point whether the list of 55 now-expired tax extenders will mirror S.1859, which included all the expiring provisions when introduced by Majority Leader Harry Reid (D-Nev.) last December.  Finance Committee staff is still negotiating what will be included in the Wyden/Hatch package, which is expected to be released on Monday morning.  Expired provisions included will not require offsets; however, provisions that are left outside of the Chairman’s mark may face up-or-down amendment votes in committee and will likely require payfors to be identified. AGC continues to advocate for a number of provisions including: an increased expensing allowance for business property (Section 179), bonus depreciation; 15-year straight-line recovery for qualified leasehold improvements; a credit for the development of renewable energy facilities; Work Opportunity Tax Credit (WOTC); as well as a credit for investments in businesses or real estate in low-income communities known as the New Markets Tax Credit. Even if an extenders bill is moved out of the Finance committee, it still is not likely to move as a free-standing bill, but it could be attached to “must pass” legislation.  With the House poring over the details of Ways and Means Chairman Dave Camp’s (R-Mich.) sweeping rewrite of the tax code and Chairman Camp signaling that he will not do a short-term extenders package — the path forward for Wyden’s upcoming tax extenders bill remains unclear. Chairman Camp plans to hold a series of hearings on the package of tax extenders in April.  He also plans to hold additional bipartisan meetings with the Joint Committee on Taxation (JCT) and public hearings on specifics portions of the tax reform draft released last month. Current efforts to renew the tax provisions could signal the direction of a possible broad tax overhaul next Congress. Despite the committees’ activity in April and coming months, a bicameral negotiation and subsequent agreement on expired tax policies is still not expected until late this year. For more information, please contact Brian Lenihan at (202) 547-4733 or lenihanb@agc.org.