Senate Finance Committee Passes $85 Billion Tax Extenders Bill

April 04, 2014

The Senate Finance Committee passed a tax extenders package that includes extensions of two years or longer on over 50 provisions totaling $85.3 billion.

The package contains provisions dealing with individuals and businesses, as well as many targeted at the renewable energy industry. Some of the largest include $15.4 billion for the research and development tax credit, $13.35 billion for section 45 and 48 renewable energy, $10.4 billion for active financing, and $6.4 billion for the state and local general sales tax deduction. 

The originally proposed package – the Chairman’s Mark – was released on Tuesday and included a two year extension on 45 provisions totaling $67.4 billion.

The final bill passed by the committee contained multiple modifications and additions as well as three revenue raising provisions, extending almost all the provisions in current law for 2013. In total, these changes added an additional $17.9 billion to the bill.

We’ve written in the past that not all tax extenders are worth extending, and that still holds true. Ideally, the tax code would be neutral and only include provisions that help mitigate the biases in the current tax code against saving and investment. This includes provisions that deal with cost recovery, such as the small business expensing provision and bonus depreciation. These provisions help move us closer to correctly defined business income.

See the table below for a list of the provisions include in the bill passed by the Senate Finance Committee.

2014 Tax Extenders Proposed by Senate Finance Committee

Source: Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act

Note: Some provisions extended for two years; others extended permanently. See here for list.


Individual Provisions

In Millions


Deduction for expenses of elementary and secondary school teachers



Mortgage Debt Relief



Parity for employer-provided mass transit and parking benefits



Deduction for mortgage interest premiums



Deduction for state and local general sales taxes



Above-the-line deduction for higher education expenses



Tax-free distributions from individual retirement plan for charitable purposes



Special rules for contributions of capital gain real property made for conservation purposes






Business Provisions


Research and experimentation tax credit



4% Credit Rate Freeze for the Low-Income Housing Tax Credit Program



Treatment of military basic housing allowances under low-income housing credit



Indian employment tax credit



New Markets Tax Credit



Credit for railroad track maintenance



Mine rescue team training credit



Employer wage credit for activated military reservists



Work Opportunity Tax Credit



Qualified zone academy bonds (QZABs)



Three-year depreciation for racehorses



15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements



Accelerated depreciation for business property on Indian reservation



Enhanced charitable deduction for contributions of food inventory



Bonus depreciation



Acceleration of AMT credits in lieu of bonus depreciation



Temporarily extend increase in the maximum amount and phase-out threshold under section 179



Election to expense advanced mine safety equipment



Deduction for domestic production activities in Puerto Rico



Modification of tax treatment of certain payments to controlling exempt organizations



Treatment of certain dividends of regulated investment companies (RIC's)



Definition of RICs as qualified investment entities under FIRPTA



Exceptions under subpart F for active financing income



Special rules for qualified small business stock



Basis adjustment to stock of S corporations making charitable contributions of property



Reduction in S corporation recognition period for built-in gains tax



Temporary increase in limit on cover over of rum excise tax revenues (from $10.50 to $13.25 per proof gallon) to Puerto Rico and the Virgin Islands



American Samoa economic development credit



Multiemployer Pension Plan Funding Rules



7-year recovery period for motorsports entertainment complexes



Special rules for certain film and television productions



Look-through treatment






Energy Provisions


Plug-in Electric Motorcycles and Highway Vehicles



Credit for alternative fuel vehicle refueling property (including hydrogen property)



Cellulosic Biofuels Producer Tax Credit



Incentives for biodiesel and renewable diesel



Indian country coal production tax credit



Credit for construction of new energy efficient homes



Cellulosic Biofuels Bonus Depreciation



Incentives for alternative fuel and alternative fuel mixtures (including liquefied hydrogen)



Credit for fuel cell motor vehicles



Credit for nonbusiness energy property



Section 45 and 48 renewables



Energy efficient commercial buildings deduction






Revenue Raisers


Extend paid preparer EIC due diligence requirements to the child tax credit



Increase levy authority on payments to Medicare providers with delinquent tax debt



 Exclusion from gross income of certain clean coal power grants








**Estimate pending or no revenue impact.


Update: This post was updated to reflect the fact that some provisions are extended for two years, while others are extended permanently.

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