Senate passes short-term tax extenders package

By Erin Voegele | December 17, 2014

On Dec. 16, the U.S. Senate passed a short-term tax extenders package that aims to retroactively extend several tax incentives that expired at the end of 2013 and throughout this year through the end of 2014. Several tax incentives relevant to the biofuel and bioenergy industries are included in the package.

The Senate passed the bill, titled “Tax Increase Prevention Act of 2014,” or H.R. 5771, by a vote of 76 to 16. The U.S. House of Representatives passed the measure by a vote of 376 to 46 on Dec. 3. President Obama is expected to sign the legislation this week. 

The legislation would extend the second generation biofuel producer credit through Jan. 1, 2015. The credits for biodiesel and renewable diesel would be extended through Dec. 31, 2014, while the Section 45 renewable energy tax credit would be extended through Jan. 1, 2015. The bill would also extend the special allowance for second generation biofuel plant property through Jan. 1, 2015 and extend the excuse tax credits relating to certain fuels through Dec. 31, 2014.

In a floor statement on the tax extenders vote, Sen. Ron Wyden, D-Ore., criticized Congress for not passing tax legislation earlier in the year. “Congress can pass this $41 billion bill, but it cannot change anything taxpayers did six, eight or 10 months ago. Those decisions have already been made, and those actions have already been taken. The only new effects of this legislation apply to the next two weeks,” he said. “That’s not nearly enough time for the important provisions in this package to catalyze growth among businesses or to support families in a meaningful way. It’s not enough time to put a dent in veterans’ unemployment, to start a clean energy project and hire new workers, or to help a student who’s on the fence about whether to enroll in college next semester.”

Wyden noted the Senate Finance Committee passed the EXPIRE Act earlier this year, which would have provided two years of tax certainty. When the bill came to the Senate floor, a host of Senators – Democrats and Republicans – said they were eager to move it forward. But unfortunately, despite strong bipartisan support, the toxic Senate environment and a battle over amendments caused the EXPIRE Act to stall,” he said. “This fall, there were discussions with the House about a bipartisan, bicameral agreement over tax extenders. I was initially encouraged – even more so when the House came around and accepted the Finance Committee’s bipartisan EXPIRE Act. Our talks also included the possibility of making several tax policies permanent.” After weeks of hard work, Wyden said House Republicans quit negotiations and settled on passing the current extenders package. In his statement, Wyden stressed that the extender debate illustrates the need to improve the tax code to end the cycle of stop-and-go-policy.

The Renewable Fuels Association called the Senate vote a step in the right direction. “The cellulosic production tax credit will help bolster the emerging cellulosic ethanol industry as plants in Iowa and Kansas are now in production. The alternative fuel vehicle refueling infrastructure tax credit will help expand E85 availability to consumers by assisting gasoline marketers in making the infrastructure investments necessary to enhance greater choice at the pump,” said Bob Dinneen, president and CEO of the RFA.

Dinneen also stressed that comprehensive tax reform is also necessary, calling the legislation a short-term solution to a long-term problem. “Once signed into law, the tax credits will be retroactively applied to 2014 and are only applicable until the end of the month. This once again forces investors and cellulosic ethanol producers to hope for the best but prepare for the worst. Today, Congress should be commended for helping businesses and consumers alike. But next year is a whole new ball game and in order to balance the scales and make future tax incentives truly helpful, Congress must take a good hard look at overarching tax reform legislation,” he said.

Growth Energy CEO Tom Buis also commended the Senate for passing H.R. 5771. “This retroactive tax package will help producers of next generation biofuels and cellulosic ethanol continue to grow and invest in the production of a cleaner burning fuel that is not only sustainable, but also helps significantly reduce greenhouse gas emissions, improves our environment and reduces our dangerous dependence on foreign oil and fossil fuels,” he said, noting he is hopeful Congress will provide certainty for producers in the future in the form of proactive tax extenders.

A full copy of the legislation, which also extends numerous tax incentives for individuals, businesses, and other purposes, can be downloaded from the Government Printing Office website.