Senate Will Address Tax Extenders The House and Senate were unable to come to an agreement on a package to extend several expiring tax provisions before Congress adjourned for the holidays. In an effort to provide a seamless extension of these provisions with the fewest disruptions and administrative problems, the Senate aims to consider legislation early in the New Year that will extend a series of tax credits that expired on Dec. 31, 2009. In a joint letter to Senate Majority Leader Harry Reid (D-Nev.), Senate Finance Committee Chairman Max Baucus (D-Mont.), and ranking member Charles Grassley (R-Iowa) acknowledged that although lawmakers were unable to reach a deal before the end of the year, "these expiring tax provisions help American families and businesses and address some of our most urgent national priorities, including job creation, at a critical time in our nation’s economic recovery…" The House passed its version of the tax extenders legislation—the Tax Extenders Act of 2009 (H.R. 4213)—in early December, but the Senate remained consumed with debate over health care reform. H.R. 4213 was approved by a vote of 241-181 and the measure includes approximately $31 billion in tax relief by extending for one year, through 2010, more than 40 provisions. The bill provides for more than $5 billion in individual tax relief and more than $17 billion in business tax relief. Among the tax breaks covered in the House bill are extensions of the research and development credit, deduction of state and local sales taxes, and the additional standard deduction for real property taxes. It also extends more than $7 billion of tax provisions that encourage charitable contributions, provide community development incentives, provide tax relief in the event of a presidentially declared disaster, and support the deployment of alternative vehicles and alternative fuels. In the joint letter to Reid, the Finance Committee leaders indicated that their package will be similar to the House-passed version. |