On Tuesday, December 16, 2014, the U.S. Senate passed
the tax extenders bill by a vote of 76-16, extending a number of
energy tax incentives through the end of the year. The Senate’s passage
of H.R. 5771 followed the U.S. House of Representatives’ (House) approval
earlier this month and the bill is expected to be signed into law by President Obama as
early as this week.
The $42 billion bill includes extensions through the end of
the year of nearly $10 billion in energy tax incentives, including the New
Market Tax Credit in Section 45D, the Production Tax Credit in Section 45 (the
PTC), and the bonus depreciation rules in Section 168(k).
Many were disappointed that some of the tax incentives –
including the PTC – were extended retroactively only through the end of the
year, meaning that tax payers have just a few weeks left to take advantage of
them. There would have been far more certainty for companies looking to invest
in renewable energy projects if the tax incentives were extended for one or
more years beyond the end of 2014. Several lawmakers suggested that the
two week extension was better than nothing, but the short extension period
means that Congress has merely punted the need for greater tax reform in this
area into 2015. As it stands, the energy tax incentives extended by this
bill will have expired by the time Congress returns to Washington, D.C., on January
6, 2015, following its winter break. That means that Congress may be in
the same place again next year under pressure to pass a year-end bill – instead
of focusing on more comprehensive reform and a possible phase-out of the PTC.
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