The United States Senate Finance Committee has been examining the various tax reliefs given to different sectors within the economy. The Committee has now passed the bipartisan Expiring Provisions Improvement Reform and Efficiency Act which continues most of tax relief for a further period of time, therefore giving rise to the expression ‘tax extenders’. New sources of government revenue required to fund these tax extenders were not agreed. As a result, the continued tax relief will add to the US fiscal deficit.
Tax extenders for businesses include the full deduction of the cost of qualifying expenditure under section 179; bonus depreciation of 50%; excise tax rebates to Puerto Rico and the US Virgin Islands in respect of exports of rum to the US; research and development credits; the work opportunity tax credit; and tax relief given to businesses in connection with renewable energy sources including wind power. In addition to these tax extenders there is also a proposal to strengthen the tax credit for research and development expenditure.
