On December 3, the House passed a tax extenders package (H.R. 5771), which extends about 50 different tax cuts to businesses and individual taxpayers. It is expected that the Senate will pass the bill before recess. Unlike the EXPIRE act passed in April of this year by the Senate Finance Committee, which would have extended the tax credits until the end of 2015, the House bill merely extends the expired provisions to the end of 2014. Renewable energy industry advocates stated that while re-instating the tax credits is welcome, simply extending them to the end of the year offers little certainty going forward for various clean energy production tax credits (PTC).
Meaningful tax reform in the Senate looked possible last week, with negotiations occurring between Senate Majority Leader Harry Reid (D-NV) and House Ways and Means Chairman Dave Camp (R-Mich.), but Democrats cried foul at the bill since it did not include the child tax credit and earned income tax credit while making several corporate benefits permanent. The President threatened to veto the bill if it reached his desk.
The on-and-off again status of the PTC has not created a stable regulatory arena for renewable technologies, with advocates saying a two-year extension is necessary for the industry to be able to make investment decisions. It is unlikely, but not impossible, that an extension of the various clean energy PTCs will be taken up by the new Republican-controlled Congress. Senator Orrin Hatch (R-OR) will chair the Senate Finance Committee in the 114th Congress, and in response to a question from reporters on whether the PTC would be extended, stated, “We’ll look at everything, but I wouldn’t give much credibility to where that will go.” Several Republicans have strongly supported the PTC in the past, including Senators John Thune (R-SD) and Chuck Grassley (R-IA) as well as Rep. Kevin Brady (R-TX).
For more information see:
Renewable energy credit extension lacks ‘credibility’ — Hatch, Govenors' Biofuels Coalition