House Passes HR 5771 Tax Extender Bill

The House of Representatives voted last night to approve a one-year retroactive extension of most the tax extender provisions by a vote of 378-46.  The bill now heads to the Senate where indications are it will be approved.

Among the tax extenders of particular interest for agribusiness that would be renewed through the end of 2014 are:

• Section 179 enhanced expensing.  The provision would extend the small business expensing limitation and phase out amounts in effect from 2010 to 2013 ($500,000 and $2 million) to property placed in service during 2014.
• Bonus depreciation.  The provision would extend fifty percent bonus depreciation to property acquired and placed in service during 2014 (2015 for certain property with a longer production period).  This provision would continue to allow taxpayers to elect to accelerate the use of AMT credits in lieu of bonus depreciation under special rules for property placed in service during 2014.
• Research and Development Credit.
• Enhanced charitable deduction for contributions of food inventory.
• Incentives for biodiesel and renewable diesel.  The provision would extend through 2014 the $1.00 per gallon production tax credit for biodiesel, the small agri-biodiesel producer credit of 10 cents per gallon, and the $1.00 per gallon production tax credit for diesel fuel created from biomass.
• Fifty cents per gallon alternative fuel tax credit and alternative fuel mixture tax credit.

While this is not the long term fix that many want and that is certainly needed, it is something for 2014.

Special thanks to David Enquist for this post.