The Senate Finance Committee on Thursday will markup legislation to renew tax extenders that have expired or will expire at the end of this year, including renewable fuels tax credits and section 179 ag expensing amounts, Chairman Ron Wyden, D-Ore., and Ranking Member Orrin Hatch, R-Utah, said Tuesday.
Included in the bill are several provisions important to agriculture. The biodiesel tax credit, which the American Soybean Association and National Soybean Board have both lobbied for, expired last year. It provides a $1 per gallon credit for biodiesel and a small agri-biodiesel producer credit of 10 cents per gallon.
"We’ve seen the biodiesel industry’s production dip and progress stall in the absence of this tax credit in the past, so this proposal is a welcome first step toward putting the industry back on track for the next two years," American Soybean Association First Vice President Wade Cowan said in a statement Wednesday.
Related: Bye Bye Hefty Section 179 Write-off?
The mark also extends the cellulosic biofuels producer tax credit, which allows facilities producing cellulosic biofuel to claim a $1.01 per gallon production tax credit on fuel produced before the end of 2013. The bill would extend this production tax credit for two additional years, for cellulosic biofuel produced through 2015.
Biofuels groups requested extension of some biofuels credits in a March 21 letter to Sens. Wyden and Hatch, suggesting that loss of the credits hits the biofuels industry particularly hard as it enters a "critical stage" of development.
Section 179, which allows small business owners, like farmers, to receive their entire depreciation deduction in one year, will also be considered in markup Thursday.
Under the proposed two-year extension of Section 179 levels, the maximum amount to expense would move from $25,000 back to $500,000 – as it was from 2010 to 2013 – and the phase-out threshold would be set at $2 million.
The proposal would also extend the definition of Section 179 property to include computer software, the chairman's mark says.
"[Section 179] enables farmers and other small business owners to expense investments made in new technology, equipment and infrastructure in their operations," ASA's Cowan said.
Not a substitute for tax code overhaul
Sen. Wyden in a press statement said the extender package is needed to project jobs and support working families, but still is not a substitute for complete tax code reform.
"I am determined this will be the last extenders bill on my watch," he said. "It's high time we focus on creating a new, 21st-century tax code, because the status quo is unacceptable."
Hatch provided similar comments, also suggesting a commitment to changing the tax code.
"For far too long Washington has acted to extend long-standing tax policy, rarely shining a spotlight on the individual provisions or their impact on the families and businesses that benefit from them. Such dysfunction must come to an end," he said.
If passed through the Senate Committee, the bill must move on through the full Senate and House.
View a complete summary of proposed extensions in the Expiring Provisions Improvement Reform and Efficiency Act.
Editor's note: Get the latest Section 179 news - What You Need To Know About Section 179