The $1 a gallon biodiesel tax credit would be revived along with other incentives for renewable energy in a Senate Finance Committee package of tax “extenders.” The committee is scheduled to discuss, and probably vote on, the package on Tuesday. It would retroactively extend four dozen tax breaks for two years, through the end of 2016. The biodiesel credit is estimated to cost $256 million a year. Tax credits for wind and solar power would be revived as part of the package at an estimated cost of $1 billion a year. Renewal of the $1.01-a-gallon production tax credit for cellulosic biofuels would cost $4.5 million annually.
The so-called Section 179 expensing provision for major purchases would be revived at an estimated cost of $336 million a year. Under the proposal, up to $200,000 could be deducted with a dollar-for-dollar phase-down for purchases that exceed $2 million. The current limit is a $25,000 deduction with the phase-out beginning at $200,000. The ceiling was raised a few years ago to encourage investment, and farm groups have pressed to keep the higher limit in force. The extenders package also would allow a 50-percent bonus depreciation on major purchases, another inducement for investors.
The House Ways and Means Committee may act this fall on tax extenders, says Feedstuffs. It said the committee approved HR 636, “which permanently increases small business expensing in Section 179 of the tax code” in February.