House Ways and Means Committee Approves Stimulus Tax Package
By a party line vote, the House Ways and Means Committee today passed the tax component of the economic stimulus bill, clearing the measure for floor consideration. The bill would provide approximately $275 billion in tax relief for individuals, businesses and state and local governments. A major change from the initial plan announced last week is the inclusion of the full repeal of the 3 percent withholding law on government contractors (the original proposal would have deferred the effective date one year).
Highlights of the bill benfiting the construction industry include:
• Extension of depreciation bonus
• Extension of enhanced small business expensing
• 5-year carryback of net operating losses
• Incentives to hire unemployed veterans and disconnected youth
• De minimis safe harbor exception for tax-exempt interest expense for financial institutions
• Modification of small issuer exception to tax-exempt interest expense allocation rules for financial institutions
• Eliminate costs imposed on state and local governments by the alternative minimum tax
• Creation of new Qualified School Construction Bonds
• Extension and increase in authorization for Qualified Zone Academy Bonds (QZAB)
• Tax credit bond option for state and local governments
• Repeal 3 percent withholding law on government contractors
• Recovery Zone Bonds for areas of high poverty, unemployment, or home foreclosures
• Tribal economic development bonds
• Long-term extension and modification of renewable energy production tax credit
• Temporary election to claim the investment tax credit in lieu of the production tax credit
• Repeal subsidized energy financing limitation on the investment tax credit
• Removal of dollar limitations on certain energy credits
• Additional Clean Renewable Energy Bonds (“CREBs”)
• Additional Qualified Energy Conservation Bonds
The Senate Finance Committee has yet to release details of its proposal. The Senate package may also include language to address the 3 percent withholding law, and it is also reported that the Senate may include an AMT patch for 2010.
Because the House Appropriations Committee having also approved the spending package, the House is expected to begin floor consideration on the complete economic recovery package next week.
For more information, contact Karen Bachman Lapsevic at (202) 547-4733 or email@example.com.
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