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Senate Finance Committee Chairman Ron Wyden, D-Ore., said Thursday that he hoped to get a bipartisan agreement on tax extenders finalized in “the days ahead,” but stated that he was “determined that this is the last time we do extenders” and that he “would like to leverage this last extension to reform the broken tax code.”
With Wyden set to mark up legislation next week to extend certain tax breaks that expired on Dec. 31, Joe Lieber of Washington Analysis said in a March commentary that the expired provisions include section 179 expensing; bonus depreciation; the research and development tax credit (for drug and biotech companies, as well as high-tech firms); the production tax credit (PTC); the $1 per gallon biodiesel tax credit; the short-line railroad tax credit; a rum tax that could benefit Puerto Rican bonds; and the Mortgage Debt Relief Act.
Of these expiring tax breaks, Lieber says that Washington Analysis believes section 179 expensing, bonus depreciation, the R&D tax credit, the short-line rail tax credit and the PTC are the most likely to be included in Wyden’s bill.
“While we don't have a call on the other provisions, that doesn't necessarily mean they won't be in the chairman's bill or make it into the legsilation after markup,” Lieber said. “In the past, all 55 or so expiring (or expired) tax breaks have been extended with little trouble. This year, however, Wyden plans to start from scratch, and to force senators to demonstrate why a given provision should be extended.”
Senate action notwithstanding, Lieber notes that there is no indication that House Ways and Means Committee Chairman David Camp, R-Mich., “plans to mark up, let alone introduce, a tax extenders bill any time soon.” In fact, he continued, “we remain of the opinion that the House won't move on a bill until a lame duck session. Accordingly, don’t look for a bill to be enacted (retroactively to Jan. 1, 2013) until sometime in late November or December.”
Check out Senate Finance to ‘Move Quickly’ on Tax Extenders on ThinkAdvisor.