U.S. Senate Finance Panel Passes Tax Extenders Package
Last Tuesday, the U.S. Senate Finance Committee passed a bill that would extend more than 50 tax provisions that are set to expire at the end of this year. The legislation includes several provisions that will reduce businesses’ tax burdens, including:
- A $22 billion extension in the research and development tax credit;
- Enhanced section 179 expensing;
- An extension of the bonus depreciation;
- Incentives to hire more veterans;
- The state and local sales tax deduction;
- Reduction in S corporation recognition period for built-in gains tax; and
- Basis adjustment to stock of S corporations making charitable contributions of property.
The bill would extend these policies for two years. According to the National Association of Manufacturers, the legislation, which provides more than $95 billion in tax reductions over two decades, also would index section 179 expensing to inflation and allow some small businesses to use the research and development credit to offset payroll taxes and limit their alternative minimum tax liability. The committee vote was overwhelmingly bipartisan: 23 senators voted for the measure while just three voted against it. The House will take up their version of this bill at some point after its August recess, which begins at the end of this week and lasts until Labor Day.