Policy

FEI, Chapters and Members Urge Congress to Pass Tax Extenders in Lame Duck


by FEI Daily Staff

Following the midterm Congressional elections , Congress has returned to Capitol Hill for the so-called “Lame Duck” session to finish work on legislation to fund the government past Dec. 11 and other priorities.

Topping the list of priorities for the business community in the Lame Duck is the extension of the expired and expiring business and individual tax provisions known collectively as “tax extenders.”

Last week, there were reports of a potential deal on tax extenders that included a two-year extension of the majority of the tax provisions (retroactive to Jan. 1, 2014 through Dec. 31, 2015), as well as permanent extensions of several tax provisions, including the following:

  • R&D credit including the modifications to expand the credit to qualifying startup businesses;
  • Increased Section 179 expensing limits ($500,000, reduced by the amount by which the cost of qualifying property placed in service during the taxable year exceeds $2,000,000, with both amounts indexed for inflation);
  • Ability to deduct state and local sales taxes;
  • American Opportunity Tax Credit;
  • Parity for the exclusion from income for employer-provided mass transit and parking benefits;
  • Reduction in the built-in gains tax holding period from 10 years to five years for businesses who are organized as S corporations;
  • Extension of basis adjustment to stock of S corporations making charitable contributions of property;
  • Exclusion from gross income of distributions from individual retirement accounts (IRAs) for charitable purposes;
  • Deduction for charitable contributions by individuals and corporations of real property interests for conservation purposes; and
  • Charitable deduction for contributions of food inventory.
Following reports of the potential deal, a number of Democratic Senators and Representatives expressed concerns over the lack of permanent provisions geared towards working families, specifically the Earned Income and Child Tax Credits. The White House also promptly issued a veto threat, stalling further movement on the package. At this time, the House may consider a bill that would only provide a one-year retroactive extension of the tax extenders through Dec. 31, 2014, as early as Wednesday. It is unclear whether the Senate would take up and pass the bill as-is or amend it with a new deal on tax extenders that Republicans would support and the President would sign into law. It is imperative that business keep up the pressure on their Representatives and Senators to pass a tax extenders bill before this Congress adjourns, or none of these important provisions will be available for the current calendar year.

FEI members are encouraged to send personal letters to their Senators and Representatives in support of action on tax extenders in the Lame Duck. Using FEI Grassroots, FEI members can send emails and tweets directly to their lawmakers on Capitol Hill. Since launching the campaign in November, FEI members have sent over 425 emails and tweets. To contact your members of Congress on tax extenders, click here.

For more information, contact Karen Lapsevic, Director, Government Affairs, at 202-626-7809 or [email protected]