Tax News

CCH (cch.taxgroup.com) reports:

Senate Finance Committee Chairman Max Baucus, D-Mont., plans to hold a member's meeting on October 17 to begin preparation for a tax extenders package that could be marked up as early as the week beginning October 22. In conjunction with the meeting, committee member Orrin G. Hatch, R-Utah, is expected to introduce a research tax credit bill that would gradually eliminate the traditional credit calculation and also gradually increase the alternative simplified credit (ASC) calculation established by the 2006 tax extenders bill.
Several temporary tax provisions expired in 2005 and were retroactively extended through December 31, 2007. The provisions were originally enacted with expiration dates that have subsequently been extended, in some cases, numerous times. The extenders include tax credits, including the work opportunity tax credit (WOTC), the welfare-to-work tax credit (WWTC), the New York WOTC, the credit for holders of qualified zone academy bonds, the research and experimentation tax credit, the credit for first-time homebuyers in the District of Columbia, the new markets tax credit and the possession tax credit with respect to American Samoa.
The extenders also include deductions for expenditures by elementary and secondary school teachers, corporate contributions of computer technology, costs of remediation of brownfields, contributions to Archer Medical Savings Accounts, capital investment in oil and gas produced from marginal wells, state and local sales taxes and several depreciation allowances. The depreciation allowances include an accelerated provision for property on Indian reservations, qualified leasehold improvements and qualified restaurant improvements. Other temporary tax provisions that expired included tax incentives for investment in the District of Columbia Enterprise Zone, an increased "cover over" of tax on distilled spirits from Puerto Rico and the U.S. Virgin Islands, and an excise tax to induce parity in the application of certain mental health benefits.
Most recently, Congress approved several extenders in legislation associated with the minimum wage and the enactment of tax benefits to offset potential higher wage costs for small businesses. When the Small Business and Work Opportunity Tax Act of 2006 became law (P.L. 110-28) in May 2007, one of the temporary tax provisions, the WOTC, was extended through August 31, 2011. Currently, the Mortgage Forgiveness Debt Relief Bill (HR 3648), includes a provision to extend the deduction of qualified mortgage insurance premiums through December 31, 2014.
By Jeff Carlson, CCH News Staff