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Tuesday September 2, 2014

Washington News

Washington Hotline

House and Senate Tax Extenders Vote

Senate Majority Leader Harry Reid (D-NV) is expected to offer the Expire Act (S. 2260) for a vote the week of May 12th. The tax extenders bill passed unanimously in the Senate Finance Committee and is expected to receive a vote of approval by the full Senate.

House Ways and Means Chairman Dave Camp (R-MI) has chosen a distinctly different path. Each of the six tax extenders passed by the House Committee has been a separate bill. The first tax extender was a simplified version of the research credit and it would be extended permanently. The bill passed in the full House on May 9th by a 274-131 vote.

Cristina Crooks of the National Association of Manufacturers was pleased with the bill and stated, “The alternative simplified credit formula makes it easier for companies of all sizes to use the research and development credit.” Under the new formula, a company would receive a 20% credit for research expenditures that exceed half of their prior three year average amounts.

The House passed the research and development credit with no tax offsets. The Democratic leadership and White House expressed concern about that decision. Minority Leader Nancy Pelosi (D-CA) stated, “Republicans are willing to make permanent changes in the law that would add more than $150 billion to the deficit.” She expressed concern that other provisions have not been passed because they did not include appropriate offsets.

The White House also expressed opposition to the permanent passage of extenders without offsets. In a press release, it stated opposition to passing the bill because it would add $156 billion to the deficit over the next decade. The release stated, “If the President were presented with H.R. 4438, his senior advisors would recommend that he veto the bill.”

Chairman Camp noted that in 2006, 2008 and other years, the research credit was passed without offsets.

Editor’s Note: Following the expected Senate passage of the tax extenders bill, the House will continue to vote on individual bills for a permanent extension of selected tax provisions. The Ways and Means Committee has suggested that they may pass other tax extenders in the future. Chairman Camp appears to be seeking a House-Senate Conference Committee to resolve the differences. He has indicated that he hopes to create three categories of extenders. First, some would be extended permanently. Second, some other extenders (perhaps including the IRA charitable rollover) would be extended for two years as is the case in the Senate bill. Third, some provisions would be allowed to lapse. The major question for donors interested in the 2014 IRA rollover is whether the Conference Committee will be held this summer or in November after the election.

Published May 9, 2014


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