Led by Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR), Senate tax writers overwhelmingly approved an extension of the dozens of tax provisions that expired at the end of 2014 commonly known as “tax extenders.” Included in the 2-year package, effective in tax years 2015 & 2016, are an improved R&D tax credit, increased Sec. 179 expensing, and 50% bonus depreciation. Sens. Dan Coats (R-IN), Mike Enzi (R-WY) and Pat Toomey (R-PA) voted “NO.” If you live or do business in Indiana, Wyoming or Pennsylvania, let those Senators know you’re disappointed with their votes.
Unfortunately even with this “early” action, it will still be difficult to get a bill to the President’s desk any time soon. Congress is in recess in August; and when business resumes after Labor Day, there are a number of big ticket items on the agenda, including the Iran nuclear deal and a looming Sept. 30 deadline for government funding to run out. Additionally, compromising to arrive at a singular approach is never easy on Capitol Hill; and the House, led by Ways & Means Committee Chair Paul Ryan (R-WI), has taken a different approach than the Senate, passing permanent individual extensions of some provisions, including R&D tax credit and increased Sec. 179, rather than a temporary extension of the entire package.
Members of Congress in both chambers can agree on one thing: nobody wants a repeat of last year when Congress last enacted the tax extenders at the end of 2014, only to watch them expire less than two weeks later. The Senate actually didn’t pass the one-year tax extender deal until Dec. 16, 2014.
It’s important to keep the pressure on lawmakers to get extenders done early this fall, even if it means only a 2-year temporary extension. That can buy time for more comprehensive reform in 2017, when a new President and Congress take office. Take a minute during the month of August to contact your Senators and Representative to let them know that the uncertainty around these tax provisions is hurting your business. Action sooner rather than later will help create a more secure environment for increased investment in R&D and equipment and, in turn, stimulate the economy and US competitiveness.