Now that comprehensive tax reform is dead in this Congress, the battle has shifted to tax extenders—the fifty odd temporary provisions of the tax code, most of which expired December 31, 2013. It is anticipated that, as in past years, most will be reauthorized.
The Administration fired a broadside on May 6, however, threatening to veto legislation that would extend the popular R&D tax credit permanently. (Politico, May 7.) The Administration’s statement insisting that tax extenders must be accompanied by offsets paying for them sets a tough new standard. It is inconsistent with action taken by the Senate Finance Committee recently approving an $85 billion tax extender package without equivalent revenue offsets.
The stakes are enormous. Many of these tax extenders will have a huge impact on both large and small businesses. An example is the bonus or accelerated depreciation which was a part of the Obama Administration’s economic stimulus.
Both the Finance and Ways and Means Committees continue to work on their tax extender bills. If businesses are unsure whether provisions from which they benefit are involved, they should check, and if so plead their case now, while the legislation can still be influenced.