Senate Finance Approves Tax Extenders Bill

July 22, 2015

pic-taxes-fileOn July 21, the Senate Finance Committee approved legislation to address the temporary tax deductions, credits and incentives that expired at the end of 2014. The committee hopes to avoid the last-minute extension of dozens of expired tax provisions that Congress passed last December that only applied retroactively and for the final two weeks of the year. The committee voted 23-3 to approve the package.

According to a description prepared by the Joint Committee on Taxation (JCT), the chairman’s mark would renew most of the expired tax provisions through 2016, retroactive to the end of 2014, without making additional policy changes. The chairman’s mark includes no revenue offsets and, according to an estimate from the JCT, would reduce federal receipts by $95.6 billion over ten years.

The bill contains 52 different provisions, 31 of which apply to business taxes, while 13 are energy-related and another eight affect individual income tax returns. Of the most significance to small businesses are the business tax provisions which expired at the end of 2014, including the research and experimentation tax credit, bonus depreciation and the threshold for section 179 expensing, all of which are intended to help small-business owners invest in their businesses.

In the House, Ways and Means Committee Chairman Paul Ryan (R-Wis.), has indicated that he would like for his panel to move an extenders bill as early as September and that he expects to include permanent extensions of several of the now-expired provisions – a likely source of contention for congressional Democrats and the White House and one of the reasons most believe enactment of a package of extenders is unlikely until closer to the end of 2015. So far, the House has passed bills making eight extenders permanent.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) said he was unsure whether the extenders package would be attached to the highway and transit legislation that lawmakers are trying to work out. The Senate is anxiously trying to wrap up work on a multi-year transportation bill so House lawmakers have enough time to consider the proposal before the August recess.

The bipartisan deal unveiled by Senate Majority Leader Mitch McConnell (R-Ky.) would authorize highway and transit programs for six years but only provide three years of funding.The House overwhelmingly passed a five-month extension of highway and transit programs last week. House Majority Leader Kevin McCarthy (R-Calif.) has said he hopes the Senate votes on the House plan before the July 31 deadline.

NSBA sent a letter of support urging passage of the tax extenders provisions included in the Senate Finance Committee package.