Tax Reform Losers from Biofuels to Coal to Get Second Chance
by Ari Natter (Bloomberg) Billions in breaks for energy sought in ‘tax extenders’ bill; Lobbyists are seeking new credits for coal, nuclear plants — Energy lobbyists, who failed to get a range of expired breaks for biofuels to coal-fired power plants into the $1.5 trillion tax overhaul bill making its way through Congress, may get a second chance before the end of the year.
The Senate plans to act on a slate of expired tax credits before month’s end, according to John Thune, the Senate’s No. 3 ranking Republican who serves on the Finance Committee. Lobbyists have been told the package of “tax extenders” — renewing tens of billions of dollars in expired tax incentives — could be hitched to must-pass government funding legislation expected in coming weeks.
Other tax credits sought for the package include the reinstatement and multiyear extension of a $1.01 a gallon tax credit for the production of cellulosic ethanol — which, unlike traditional corn ethanol, is made from garbage, algae and corn stover — and a $1 per gallon credit for biodiesel. Both of which have been championed by Iowa Republican Senator Chuck Grassley.
Oil companies, ethanol producers, labor unions and environmental groups are also working to persuade lawmakers to renew — and expand — a tax credit that rewards businesses for every ton of carbon dioxide they capture. Under current policy, the credit for that captured gas — worth $10 or $20 per ton, depending on how it is stored — runs out once 75 million tons worth of credits are used.
Supporters of that 45Q tax credit, as it is known, argue it helps encourage companies to clean up emissions from ethanol plants, refineries and power plants, while ensuring the oil industry has enough carbon dioxide to pump underground and boost crude extraction. READ MORE
SPLIT OVER EXTENDERS? (Politico’s Morning Energy)
Excerpt from Politico’s Morning Energy: Ways and Means Chairman Kevin Brady told reporters Wednesday he doesn’t like the idea of moving a package of extenders this year but hasn’t made a final decision yet, Pro Tax’s Brian Faler reports . “It’s horrible policy and process,” he said. But those comments come as Thune, the Senate’s number three Republican, said lawmakers will revive biodiesel, geothermal and other energy-related breaks along with other “cats and dogs.” Doing an extenders package as the chambers work to iron out differences between their broader tax bills is likely to test tax writers’ bandwidth. READ MORE