New EXPIRE Act Would Extend $86 Billion in Tax Breaks Until December 31, 2015

Almost all of the 55 tax breaks that expired December 31, 2013, were once again extended by the Senate Finance Committee last week.  The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act of 2014, which still requires the vote of the full Senate and House, would extend the tax breaks through Dec. 31, 2015.

This tax break package totals $86 billion and provides a wide range of benefits, including those for wind energy, U.S-based multinational corporations and motor sports track owners.

Some of the breaks of most significance to our clients include:

  • Research & Development  Tax Credits
  • 179D Energy Efficiency Deductions for Commercial Buildings
  • Energy Efficiency Credits for Multifamily & Residential Developers
  • 50% Bonus Depreciation & 179 Expensing Thresholds
  • 15-Year Life for Qualified Real Property
  • Hiring & Employment Credits

We have been waiting for movement on these tax breaks since last fall, long before the year-end expiration. While the bill makes a sweeping extension of most tax breaks, a few were modified, and only a very few left on the chopping block.

While the Senate Finance Committee overwhelmingly approved this bill with a bipartisan vote, some advocate wanting to avoid future temporary extensions; others want to overhaul the tax code completely.  Lawmakers have been unable to find a way out of temporarily extending certain provisions and typically end up compromising and extending all or a large majority of the breaks. The research and development credit, for instance, has been expiring periodically since it became law in 1981.

Accounting Today quoted Ron Wyden of Oregon, the chairman of the Senate Finance Committee, as saying “this will be the last tax extenders bill the committee takes up as long as I am the chairman.”

We will continue to follow the developments of the EXPIRE Act, and keep you informed on those that will have the greatest impact on you and your business.