Good News: Senate Finance Committee Approves Tax Extenders Bill

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On April 3, the Senate Finance Committee, under the reign of new Chairman Ron Wyden (D-Ore.), marked up and approved a bill that would   provide for short-term extensions of about 50 expiring    federal tax credits and other tax incentives. The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act includes provisions:

  • Renewing a minimum 9% rate for the 70% present value low-income housing tax credit, which lapsed December 31, 2013. The minimum rate would apply to allocations made between January 1, 2014 and December 31, 2015;
  • Establishing a minimum 4% rate for the 30% present value housing credit, for acquisition costs not financed by tax-exempt bonds. The provision would apply to pre-2016 allocations for buildings placed in service after the date of the bill’s enactment;
  • Renewing through 2015 a provision excluding military housing allowances from household income for purposes of the LIHTC income eligibility rules, for certain geographic areas;
  • Renewing the new markets tax credit program for two years, through 2015, with $3.5 billion in annual allocation authority;
  • Extending through 2015 the renewable energy production tax credit as well as the election to take the 30% investment tax credit instead of the production tax credit ; and,
  • Renewing the Section 179D tax deduction for expenditures to make commercial buildings more energy efficient.


(EXPIRE Act: http://tinyurl.com/ou3vf7e)

Extenders Bill Action Welcomed

Tax credit industry officials welcomed the Senate Finance Committee action.

Peter Lawrence, director of public policy & governmental affairs at Novogradac & Company LLP, described as “very good news” the inclusion of the LIHTC and new markets tax credit provisions in the extenders bill.

“I also thought it was very fortunate that so many [Finance Committee] members spoke up for both credits in the markup,” he said. “That was very positive.”

Senate Majority Leader Harry Reid (D-Nev.) plans to bring the extenders bill to the Senate floor after Congress returns from its current recess the week of April 28th.

Prospects for Extenders Uncertain

However, the timing and prospects for passage of extenders legislation this year are uncertain. Even if the Senate passes the EXPIRE Act, the Constitution requires tax bills to originate in the House of Representatives. Moreover, the Finance Committee package has a high estimated cost – $85 billion over 10 years.

Meanwhile, House Ways and Means Committee Chairman Dave Camp (R-Mich.) recently indicated that he wants to make a limited number of expiring tax provisions permanent, as a first step toward comprehensive tax reform legislation, through a series of future markup sessions by the committee. Chairman Camp’s recently unveiled tax reform “discussion draft” would extend or make permanent only seven business-related tax provisions and eliminate most other current or expired tax incentives.