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Lead Tax Report
The following story is from the November 23 issue of the Daily Tax Report.
Tax Legislation
House Crafting Tax Extenders Bill
For Action by End of November
House tax writers are looking to move an approximately
$30 billion one-year tax extenders bill as early as the week of Nov. 30, according to lawmakers and lobbyists.
According to a Ways and Means Committee summary of the as-yet-unavailable Tax Extenders Act of 2009, it would include more than $5 billion in individual tax relief; more than $17 billion in business tax relief; $1.2 billion to encourage charitable giving;
$2.6 billion for expiring community assistance programs; $2.3 billion to extend certain disaster tax relief provisions; and just over $1 billion to extend certain expiring energy tax provisions.
Included on the list of annual extenders is an extension of the research and development credit, an extension of the deduction of state and local general sales taxes, and a straight-line recovery for qualified leasehold and restaurant improvements. The list also includes a one-year extension of the new markets tax credit, and a one-year extension of a statute that allows look-through treatment of payments between related controlled foreign corporations under the foreign personal holding company rules.
According to sources familiar with the floor schedule, it is possible that the leadership will bypass a Ways and Means markup and go straight to the floor with the measure. Republican staff members objected to that idea Nov. 20, with one saying lawmakers “expect and prefer” tax bills to go through the committee.
Rangel Eager for 2010 Tax Reform Debate
For his part, Chairman Charles Rangel (D-N.Y.)
said Nov. 19 that having to consider another tax extenders bill makes him eager to get to 2010 when Congress could debate overall tax reform. Rangel said people have “forgotten” why some extenders are still in the tax code and described himself as “embarrassed for some of them,” but acknowledged with the short time frame and heavy schedule it is better to extend them once more than to begin tax reform hearings seeking a justification.
But Rangel made it clear that once tax reform discussions begin in earnest, unjustified extenders will find themselves on the chopping block.
Although the outline for the standalone measure does not include any offsets, lobbyists said that the Stop Tax Haven Abuse Act (H.R. 1265) introduced March 3 by Rep. Lloyd Doggett (D-Texas)
and taxing carried interest at the 15 percent capital gains rate could be under consideration (40 DTR G-6, 3/4/09).
Across the Capitol, the Senate Finance Committee could pay for its extenders package with an amendment that would disallow the prospective use of a new $1.01-per-gallon cellulosic biofuels producer tax credit by paper companies seeking to use a pulp by-product known as “black liquor” to fuel their plants (221 DTR GG-1, 11/19/09).
By Heather M. Rothman
Text of the Ways and Means Committee description is in TaxCore.
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