ADVERTISEMENT
2 /3 FREE ARTICLES LEFT THIS MONTH Remaining
Chemistry matters. Join us to get the news you need.

If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.

ENJOY UNLIMITED ACCES TO C&EN

Energy

R&D Tax Breaks Face Uncertain Fate

Tax Policy: Legislation to extend incentives clears key Senate committee, but hurdles remain

by Glenn Hess
August 8, 2012 | APPEARED IN VOLUME 90, ISSUE 33

Baucus
[+]Enlarge
Credit: Courtesy of Max Baucus
09033-notw3-Baucuscxd.jpg
Credit: Courtesy of Max Baucus

Legislation to extend several dozen expired or soon-to-expire tax breaks, including a credit for research and development activities and incentives for the production of alternative transportation fuels, has cleared the first hurdle—approval by the Senate Finance Committee.

In the past, the provisions have been extended with little fanfare. But Congress is unlikely to sign off on this package anytime soon because lawmakers in both parties want to use the tax breaks as bargaining chips in upcoming battles over spending cuts and income tax rates.

The Finance Committee endorsed the $205 billion package of so-called tax extenders by a vote of 19-5 on Aug. 2. Sen. Max Baucus (D-Mont.), committee chairman, said businesses need certainty to hire, invest, and grow. “This bipartisan work is just what all members of Congress will need to do with the fiscal cliff looming and tax reform on the horizon,” he remarked after the vote.

Baucus was referring to the feud between Democrats and Republicans in both the House of Representatives and the Senate over how to avoid the sequester, or $109 billion in automatic, across-the-board spending cuts that are scheduled to take effect on Jan. 2, 2013.

Baucus said he hopes the full Senate will vote on the tax extenders package soon. But lawmakers are on a monthlong summer recess and won’t return to the nation’s capital until Sept. 10. Meanwhile, Rep. Patrick J. Tiberi (R-Ohio), who is spearheading the House effort to extend the tax breaks, has said that his legislation will not be ready until after the November elections.

The R&D tax credit, which expired at the end of 2011, allowed companies that perform technological research in the U.S. to take a 14% tax break on the costs of wages and materials. The draft Senate measure would retroactively renew the research credit through 2013.

The Biotechnology Industry Organization “strongly supports the provisions of the package which would extend the valuable R&D tax credit for two years,” says James C. Greenwood, CEO of the trade association.

The Senate proposal also includes a production credit for wind energy, as well as tax breaks for a variety of alternative fuels and associated infrastructure, including biodiesel, cellulosic biofuels, vehicles fueled by compressed or liquefied natural gas, and electric vehicles.

Advertisement
X

Article:

This article has been sent to the following recipient:

Leave A Comment

*Required to comment