Senate committee advances two-year approval of tax extenders

Senate committee advances two-year approval of tax extenders

The Senate Finance Committee moves a set of tax breaks through for a two-year extension

The Senate Finance Committee on Tuesday approved a number of expired tax provisions for two years with a 23-3 vote.

The "extenders," which include higher Section 179 expensing levels, bonus depreciation and continuation of the Second Generation Biofuel Producer Tax Credit, the Special Depreciation Allowance for Second Generation Biofuel Plant Property, and the Alternative Fuel Mixture Excise Tax Credit.

Collectively, the extenders are worth about $95.2 billion, The Hill reported.

Senate Finance Committee Ranking Member Ron Wyden, D-Ore., left, and Chairman Orrin Hatch, R-Utah, right, speak during a hearing April 16, 2015. (Photo by Gabriella Demczuk/Getty Images)

The House already has approved permanent extensions of some tax extenders through H.R. 636, America's Small Business Tax Relief Act of 2015. That bill also includes higher Section 179 expensing that allows farmers, ranchers and small business owners to deduct up to $500,000 in qualifying expenses with a phase-out threshold of $2 million.

Related: What you need to know about IRS Section 179

With higher expensing levels, farmers and ranchers have been able to more easily justify needed investments in machinery.

While the Senate Finance Committee has only approved a two-year extension of this provision, which will be effective until 2016, the move gets extenders one step closer to avoiding a last-minute December approval.

Last year, an 11th hour agreement signed in late December allowed a host of tax extenders to be approved for the 2014 tax year – leaving only a few days for farmers and small business owners to take advantage of savings on equipment purchases.

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In a statement prior to markup, Wyden said the two-year bill is "the right way to ensure these incentives live up to the hype. The budgetary math might look the same regardless of the date, but the economic value of these incentives virtually disappears when Congress waits until the end of the year," he said.

"The economy would get about as much use out of spending those billions on 8-track tapes and pocket pagers," he added.

Luckily, House Ways and Means Committee Chairman Paul Ryan, R-Wis., agrees that action needs to be sooner rather than later.

Ryan earlier this summer told a group assembled at a Wall Street Journal conference that extenders should be considered soon to ensure businesses can take advantage of them fully.

"On the extenders, we want to do this as early as possible in the fall," he said.

While some legislators hold out for a larger reform of the tax code, and Wyden said that's coming, tax extenders will be the way forward for now.

"These temporary tax provisions are nobody’s idea of perfect economic policy. If each member of this committee was made king or queen for a day and wrote their own bills, you’d likely wind up with 26 different products. But the reality is, there are economic priorities in this bipartisan package that are vital to families, businesses and communities in Oregon and across the country. With the understanding that our long-term goal is a tax code overhaul that works for all Americans, Congress needs to get these provisions back in place," he said.

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