December 17, 2019
Congressional Leadership Strike Deal on Tax Extenders/ Government Spending Package
Biodiesel Credit is In and EV Credit is Out!
Tobacco21 in Spending Bill
by PMAA
In the wee hours of this morning, Congressional leadership reached an agreement on a tax extender’s package including a retroactive extension of the $1 per gallon biodiesel blender’s tax credit through December 31, 2022. Congress is expected to attach the tax extender’s package to a must-pass government spending bill which is slated to be approved by the end of this week. The White House is expected to sign the agreement into law before the December 20th government funding deadline. A retroactive multiyear extension of the biodiesel blender’s tax credit is a significant win for the industry.
Additionally, the tax extenders package does not include an extension of the $7,500 electric vehicle tax credit. According to a recent study, the EV tax credit alone would cost taxpayers as much as $15.7 billion, and it would only benefit a few companies who have already hit their EV targets as well as individuals making over $100,000 per year. The Trump Administration warned lawmakers if they tried to include the EV credit in the extenders package, it could kill the whole deal.
Also included in the tax extenders/gov’t spending package:
- The legal tobacco purchasing age would be raised to 21.
- The Oil Spill Liability Tax (OSLT) would be renewed on a prospective basis through December 31, 2020. The nine cents per barrel OSLT tax is imposed on crude oil at the refinery gate. Proceeds from the OSLT go into a trust fund used by the Coast Guard to pay for clean-up after accidents like oil spills. The effective date of the OSLT would apply on and after the first day of the first calendar month beginning after the enactment date of the tax extenders package.
- The Alternative Fuel Infrastructure tax credit would be retroactively renewed through December 31, 2020. Specifically, fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20% biodiesel installed from December 31, 2017, through December 31, 2020, is eligible for a tax credit of 30% of the cost, not to exceed $30,000.
- The residential energy efficiency tax credit would be retroactively renewed through December 31, 2020, for water heaters, furnaces, boilers, heat pumps, building insulation, windows, and roofs.
- The “Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019” is also included which is comprised of a number of relatively small improvements which taken together should improve the qualified retirement plan system. The Small Business Legislative Council will have a full report later.
- Permanent repeal of Obamacare’s “Cadillac tax” on high-cost employer health plans, as well as the health insurance tax and medical device tax which were originally approved as part of the healthcare law to fund its coverage expansion.
- Wind production tax credit would get a one-year extension at existing rates.
The tax extender’s agreement marks the end of a busy month in Washington, DC. Last week, Congressional leaders and the White House agreed to a new US/Mexico/Canada trade agreement and the White House struck a tentative trade deal with China.
For questions, contact
Scott Fisher, Sr. Vice President of Policy & Public Affairs,
512.617.4308 / sfisher@tffa.com.
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