Black Liquor, Economic Substance Are Senate Extenders Offsets

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

Senate Finance Committee Chairman Baucus says legislation (H.R. 4213) to extend $31 billion in expired tax cuts will be paid for by codifying the economic substance doctrine and denying paper mills a biofuels tax credit for their use of a fuel known as black liquor. The revenue raisers would offset one-year extensions of more than 40 tax cuts for individuals and businesses that already expired at the end of 2009. The tax cuts include provisions that would extend the popular research and experimentation tax credit, the active financing exception, and a 15-year cost recovery provision for improvements to restaurants and retailers. The largest revenue raiser would prohibit the paper industry from claiming a new $1.01 per gallon cellulosic biofuels producer tax credit for their use of black liquor.