WASHINGTON, Dec. 16, 2014 – The Senate tonight overwhelmingly gave final congressional approval to reinstating more than 50 expired tax breaks, including the Section 179 expensing allowance that some farmers had been waiting on before buying new tractors and other equipment.
The so-called tax-extenders bill, which now goes to President Obama for his signature, also would revive a bonus appreciation allowance along with a series of tax incentives for wind energy and biofuels, including the $1-a-gallon credit that subsidizes biodiesel.
The tax breaks will expire again Dec. 31, because lawmakers were unable to reach a deal with President Obama for a longer-term extension.The bill, approved 76-16, was one of the last items left on the agenda of the lame-duck Senate.In a victory for agricultural shippers, the Senate also rolled into the legislation a barge fuel-tax increase that would help pay for improvements to waterways including locks and dams on the Mississippi River. The 9 cent per gallon tax increase is matched by general revenue and is expected to raise about $80 million a year.
Sen. John Hoeven, R-N.D., went to the floor this afternoon to read from letters constituents had sent him complaining about uncertainty created by the lapse in tax incentives, including the Section 179 allowance. “If we don’t act, taxes will go up on hardworking Americans, on small businesses across this country, on farmers, and so we need to act,” Hoeven said.
The Section 179 provision would keep the expensing limitation at $500,000 for this year, the level that has been effect since 2010. Without the extension it reverts to $25,000. The provision costs the government about $1.4 billion.
The bill, H.R. 5771, also would reinstate a 50 percent bonus depreciation for the purchase of new capital assets, including farm equipment.
[Like what you see on the Agri-Pulse website? See even more ag and rural policy news when you sign up for a four-week FREE trial Agri-Pulse subscription.]
The wind industry's tax credit would be reinstated for this year -- at a cost of nearly $10 billion -- but there has been discussion about eventually phasing it out.
Bob McCan, president of the National Cattlemen’s Beef Association, welcomed the bill’s passage. “This tax extenders package encourages economic growth and provides greater certainty in the tax code," he said.
The Association of Equipment Manufacturers, which includes Deere & Co., said the legislation was long overdue.
"Equipment manufacturers and their customers shouldn't have to wait until mid-December to learn what their tax obligations were for virtually the entire preceeding year," AEM President Dennis Slater said in a statement.
The legislation also includes one-year extensions of the second-generation biofuel production tax credit and the accelerated depreciation allowance for cellulosic biomass properties, as well as recently expired tax credits for alternative fuel vehicle refueling infrastructure and alternative fuel mixtures.
Bob Dinneen, president and CEO of the Renewable Fuels Association, called the package “a step in the right direction,” but noted that “comprehensive tax reform is also necessary because today’s legislation is a short term solution to a long term problem.”
#30
