House Passes Major Legislation to Prevent Tax Increases

Bipartisan package includes 9 bills introduced by Rep. Kelly

WASHINGTON — U.S. Representative Mike Kelly (R-PA) – a member of the House Ways and Means Committee – issued the following statement today in praise of H.R. 2029, the Protecting Americans from Tax Hikes (PATH) Act, which was passed by the House of Representatives this afternoon by 318-109. The bipartisan legislation makes permanent more than 20 tax relief provisions, extends for five years or two years a number of other tax relief provisions which expired at the end of calendar year 2014, provides for a two-year moratorium on the medical device tax within the Affordable Care Act (Obamacare), and includes a number of additional tax policy changes. It includes provisions originally introduced as nine separate bills by Rep. Kelly.

Statement by Rep. Kelly:

“Today’s legislation is a massive achievement for hardworking American taxpayers, small businesses, and our entire nation’s economy. It protects millions of families and job creators from imminent tax increases and restores both certainty and clarity to our outdated tax code, while paving the way for comprehensive tax reform to make the code fairer and simpler. It also changes the law to better protect Americans from further abuse at the hands of the IRS.

“I’m especially glad this package contains numerous provisions that I personally fought to include for the sake of creating jobs, restoring economic growth, and protecting hard-earned taxpayer dollars.”

Full List of Kelly Provisions

Permanent Provisions:

Section 111: An extension and modification of special rule for contributions of capital gain real property made for conservation purposes. This provision permanently extends the charitable deduction for contributions of real property for conservation purposes. The provision also permanently extends the enhanced deduction for certain individual and corporate farmers and ranchers. The provision modifies the deduction beginning in 2016 to permit Alaska Native Corporations to deduct donations of conservation easements up to 100 percent of taxable income. Originally introduced as H.R. 641, the Conservation Easement Incentive Act of 2015

Section 121: As part of the Research & Development permanent extension (Section 121),  this provision states that “beginning in 2016 eligible small businesses ($50 million or less in gross receipts) may claim the credit against alternative minimum tax (AMT) liability, and the credit can be utilized by certain small businesses against the employer’s payroll tax (i.e., FICA) liability.” Originally introduced H.R. 3058, the Innovator Job Creation Act of 2015

Section 123: An extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. This provision permanently extends the 15-year recovery period for qualified leasehold improvements, qualified restaurant property, and qualified retail improvement property. Originally introduced as H.R. 765, the Restaurant and Retail Jobs and Growth Act of 2015

Two-Year Provisions:

Section 164: An extension of qualified zone academy bonds. This provision authorizes the issuance of $400 million of qualified zone academy bonds during 2016. The bond proceeds are used for school renovations, equipment, teacher training, and course materials at a qualified zone academy, provided that private entities have promised to donate certain property and services to the academy with a value equal to at least 10 percent of the bond proceeds. Originally introduced as H.R. 3703, the Investing in 21st Century Schools Act

Section 181: An extension and modification of credit for nonbusiness energy property.  This provision extends through 2016 the credit for purchases of nonbusiness energy property.  The provision allows a credit of 10 percent of the amount paid or incurred by the taxpayer for qualified energy improvements, up to $500. Originally introduced as H.R. 2517, the Powering American Jobs Act of 2015

Section 182: An extension of credit for alternative fuel vehicle refueling property. This provision extends through 2016 the credit for the installation of non-hydrogen alternative fuel vehicle refueling property. (Under current law, hydrogen-related property is eligible for the credit through 2016.)  Taxpayers are allowed a credit of up to 30 percent of the cost of the installation of the qualified alternative fuel vehicle refueling property. Originally introduced as H.R. 2517, the Powering American Jobs Act of 2015

Section 185: An extension of biodiesel and renewable diesel incentives. This provision extends through 2016 the existing $1.00 per gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon. The provision also extends through 2016 the $1.00 per gallon production tax credit for diesel fuel created from biomass. The provision extends through 2016 the fuel excise tax credit for biodiesel mixtures. Originally introduced as H.R. 2517, the Powering American Jobs Act of 2015

Section 342: An excise tax credit equivalency for liquefied petroleum gas and liquefied natural gas. This provision converts the measurement of the alternative fuel excise tax credit for liquefied natural gas and liquefied petroleum gas from 50 cents per gallon to 50 cents per energy equivalent of a gallon of diesel fuel, which is approximately 29 cents per gallon for liquefied natural gas and approximately 36 cents per gallon for liquefied petroleum gas. The provision is effective for fuel sold or used after 2015. Originally introduced as H.R. 898, the Energy Production Fairness Act

Miscellaneous Provisions:

Section 309: Prevention of the extension of the tax collection period for members of the Armed Forces who are hospitalized as a result of combat zone injuries. This provision requires that the collection period for members of the Armed Forces hospitalized for combat zone injuries may not be extended by reason of any period of continuous hospitalization or the 180 days after hospitalization. Accordingly, the collection period expires 10 years after assessment, plus the actual time spent in a combat zone. The provision applies to taxes assessed before, on, or after the date of the enactment. Originally introduced as H.R. 2572, the Wounded Warrior Tax Equity Act of 2015

Section 332: Removal of bond requirements and extending filing periods for certain taxpayers with limited excise tax liability. This provision allows producers of alcohol that reasonably expect to be liable for not more than $50,000 per year in alcohol excise taxes to pay such taxes on a quarterly basis rather than twice per month (and those reasonably expecting to be liable for not more than $1,000 per year to pay such taxes annually, rather than on a quarterly basis). The provision also exempts such producers from bonding requirements with the IRS. The provision is effective 90 days after the date of enactment. Originally introduced as H.R. 2238, the Craft Beverage Bond Simplification Act of 2015

Tax Administration:

Section 403: Release of information regarding the status of certain investigations. This provision allows taxpayers who have been victimized by the IRS, for example, through the unauthorized disclosure of private tax information, to find out basic facts, such as whether the case is being investigated or whether the case has been referred to the Justice Department for prosecution. The provision applies to disclosures made on or after the date of enactment.  Originally introduced as H.R. 1026, the Taxpayer Knowledge of IRS Investigation Act

NOTE: More information about the PATH Act can be found here and here.

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