That is on top of the regular depreciation schedule. Introduced by Rep. Pat Tiberi (R-Ohio), the bill, H.R. 4718, would also make permanent the election to accelerate AMT credits in lieu of bonus deprecation.
First introduced in 2008, Congress has modified and extended bonus depreciation on a temporary basis as a tool for economic stimulus. The most recent extension of bonus depreciation expired on Dec. 31, 2013.
H.R. 4718 is one of several measures that have been approved by the House Ways and Means Committee that would make certain temporary business and individual tax provisions permanent. Congress historically renews these provisions – now numbering over 50 – on an annual, often retroactive basis. The uncertainty surrounding the annual “tax extenders” package can affect business planning. Among the bills approved by the House tax-writing committee are:
- H.R. 4438, a bill to modify and make permanent the research and development (R&D) tax credit. (The House passed this FEI-supported bill by a vote of 274-131 on May 9.)
- H.R. 4457, a bill to make permanent the increased section 179 small business expensing limits. (The House voted 272-144 to pass the bill on June 12.)
- H.R. 4453, a bill to make permanent the reduced recognition period for built-in gains of S corporations, and to make permanent certain rules regarding basis adjustments to stock of S corporations making charitable contributions of property. (The House passed H.R. 4453 by a vote of 263-155 on June 12.)
- H.R. 4429, a bill to make permanent the subpart F exceptions for active financing income.
- H.R. 4464, a bill to make permanent look-through treatment for payments between related CFCs.
Both H.R. 4429 and H.R. 4464 are pending further consideration on the House floor.
The U.S. Senate is approaching tax extenders in the more traditional manner. The Senate Finance Committee approved a bill on April 3 that would extend nearly all of the tax provisions that expired at the end of 2013 for two years, and those that expire at the end of 2014 for one year through 2015. The bill, S. 2260, includes the R&D credit, CFC look-through treatment, subpart F exceptions for active financing income, as well as 50-percent bonus depreciation.
FEI sent a letter to the Senate supporting the bill on May 14, in conjunction with an FEI Grassroots campaign that generated dozens of FEI member-written letters to the Senate in support of the bill.
In May, the Senate considered by failed to pass the Finance Committee-approved bill over a disagreement over amendments that would be considered on the floor. Senate Majority Leader Harry Reid (D-Nev.) has said that tax extenders would not be considered until after the November elections in a “lame duck” session of Congress.
The House and Senate will have to reconcile their differing approaches to tax extenders, as well as address concerns that the tax revenue cost is not currently offset.
For more information, contact Karen Lapsevic, Director, Government Affairs, at 202-626-7809 or [email protected].