Tuesday , January 21 2020

Congress mulls reviving tax breaks prized by ADM, Tesla

Bloomberg

US lawmakers led by Senate Finance Committee Chairman Charles Grassley are negotiating a potential revival of expired tax breaks in last-minute negotiations over a government spending bill.
The talks are focussed on reinstating the so-called tax extenders, a move that could be a boon to the biofuel and short-line railroad industries that were hoping to see renewal of valuable credits and deductions, according to a person familiar with the discussions.
“Chairman Grassley has been leading bicameral negotiations on tax extenders and is working to make sure they are included in the year-end appropriations package,” Michael Zona, a spokesman for Grassley, said. “Dropping tax extenders like biodiesel would be a major setback and may push more plants that employ thousands of Americans towards bankruptcy.”
The negotiations are taking place as the House and Senate seek to strike a deal that would fund the government before the current stopgap package expires on Friday.
The tax breaks lapsed at the end of 2017. Since then, businesses have been expecting Congress to retroactively extend the benefits as lawmakers have repeatedly done in years past. So far, no relief has materialised.
The talks present a particularly acute boost to the biodiesel sector — including Archer-Daniels-Midland Co and Renewable Energy Group Inc — which is advocating for a retroactive extension of a $1 per gallon tax credit for biodiesel. Several plants have begun slashing production and laying off workers as a result of the two-year lapse of the tax credit.
It also could also buoy tax breaks for those thinking of buying electric cars from General Motors Co and Tesla Inc, which had been lobbying for an extension of a lucrative consumer tax credit for electric vehicle purchases.
The $7,500 credit is still in effect, but Congress has capped the number of credits at 200,000 for each manufacturer. Both GM and Tesla have already reached the threshold.
The 2017 tax overhaul temporarily lowered the excise tax for brewers, wine makers and distillers. The provision, which has strong bipartisan support, is credited with helping the craft beverage industry expand.
Others hoping to use the year-end spending bill as a vehicle for their tax credit includes the solar industry, which is preparing to see it’s 30% investment tax credit start decreasing next year.

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