Houses passes one-year tax break extension
The House today passed a one-year extension of tax breaks for business that includes the Section 179 deduction popular with farmers and some renewable energy provisions.
The vote was 378 in favor and 46 opposed.
Some members of Congress had hoped to make some of the tax breaks permanent, but President Barack Obama threatened to veto that longer-term package because it did not include tax breaks for middle class and low-income people.
The House bill is controversial in the Senate, but the upper chamber is expected to accept the House bill.
Farmers use the tax breaks to increase their deductions for buying farm equipment. Congress let the Section 179 deduction drop to $25,000 for 2014, but the bill would increase it to $550,000 for expenditures under $2 million. The provision is expected to save farm businesses about $1.43 billion in taxes, DTN/The Progressive Farmer reported.
The bill would also extend the $1 per gallon tax credit for biodiesel, the 10-cent a gallon small agri-biodiesel tax credit and the cellulosic fuels tax credit for 2014.
The biofuel provisions are projected to save the industry about $1.3 billion in federal taxes, DTN/The Progressive Farmer said. It also includes the wind production tax credit for 2014, saving that industry nearly $9.6 billion. Conservative groups have fought hard against the wind tax credit.
The American Soybean Association praised the passage of the bill, but said there needs to be a longer-term solution.
“ASA first and foremost supports a long-term extension of several of the items included in today’s short-term fix,” said ASA President and Iowa farmer Ray Gaesser.
“These initiatives include the dollar-per-gallon biodiesel tax credit, expensing for farm equipment and infrastructure under the Section 179 expensing provision, and bonus depreciation on farm asset,” Gaesser said. “Such an approach provides greater certainty and a more stable climate for the farmers and producers who make use of these programs, and we were very disappointed that agreement was not reached on a broader measure.“
“That said, we support the House’s passage of their short-term extension in the absence of a more permanent solution,” he said. “While it remains only a stopgap measure, we hope that the Senate will take up and pass it quickly. At that point, we urge both chambers to join together and tackle the work of extending these critical tax incentives for the long term.”
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