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House Tax Extenders Package Moves Forward – Biodiesel Tax Credit Included


A lengthy House Ways and Means Committee markup on a tax extenders package as well as a bill to expand low to middle income worker tax credits was approved yesterday. H.R. 3301, the ‘‘Taxpayer Certainty and Disaster Tax Relief Act of 5 2019,’’passed by a vote of 25 to 17, while H.R. 3300, the “Economic Relief Act,” passed by a vote of 22 to 19 with three Democrats opposing because of the cost and a lack of an off-set. Committee Chairman Richard Neal (D-MA) introduced the bills prior to the markup to extend the series of expired business tax credits including the $1 per gallon biodiesel tax credit that expired on December 31, 2017.

The biodiesel credit would be revived retroactively for 2018 and continued through 2019 and 2020. The Oil Spill Liability Tax (OSLT) would be extended through 2020 and would not be applied retroactively, which is welcome news for petroleum marketers. Additionally, fueling equipment for natural gas, propane, liquefied hydrogen, electricity, E85, or diesel fuel blends containing a minimum of 20 percent biodiesel installed through December 31, 2020, would also be eligible for a tax credit of 30 percent of the cost, not to exceed $30,000. Finally, the residential energy efficiency tax credit for water heaters, furnaces, boilers, heat pumps, building insulation, windows and roofs would be renewed through 2020. For more information, click here.

The Democrat’s proposal would also triple the maximum Earned Income Tax Credit (EITC) available to childless adults; make the child tax credit generally fully refundable; expand a break for dependent care expenses; and provide disaster relief funding. Though Neal has floated raising the corporate tax rate to 22 percent from 21 percent to partially pay for the extender’s package, it is not in the package. The extenders package is estimated to cost $33.2 billion and the total package is scored at about $106.6 billion.

The measure faces opposition in the Senate in part because Neal has proposed paying for these extensions by ending higher exemption levels for the estate tax at the end of 2022, instead of 2025 as currently scheduled.

The good news is that the Senate tax extenders bill may have a better chance of passing. In March, Senate Finance Committee Chairman Chuck Grassley (R-IA) introduced legislation that would retroactively extend most of the provisions through 2019 including the biodiesel tax credit. Additionally, the OSLT would be extended through 2019 and would not be applied retroactively, which is welcome news for petroleum marketers.


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