- House Passes Tax Package
- December 29, 2015
- Law Firm: McDonald Hopkins LLC - Cleveland Office
- On Thursday, the House passed a $622 billion tax package. The bill was passed by a wide bipartisan margin, with 77 Democrats joining 241 Republicans in voting for the measure.
Only three Republicans voted against the tax package, which is one of the two major pieces of legislation that the House has been working to finish before the Christmas break.
The Obama White House has signaled its support for the tax extenders package and the Senate is also likely to approve it - though they are likely to combine it with the omnibus in the upper chamber.
The tax package makes the research and development tax credit permanent, as well as making permanent small business expensing under section 179 of the tax code.
While many Democrats opposed the package, Democratic leadership did not whip its members against the bill.
Other tax breaks that would be cemented include the expansions of the earned income tax credit, the child tax credit, and the American opportunity tax credit, which were all created under President Obama's stimulus law.
In addition, the deal locks in the deduction for classroom expenses for teachers, the deduction for state and local sales taxes, and an exclusion related to mass transit.
The bill also includes five tax provisions relating to charitable giving, including a provision allowing individuals to exclude distributions from their IRAs to charities.
Lastly, the bill enshrines three incentives for real estate, including a provision that places the minimum low-income housing tax credit rate for new buildings at nine percent of certain costs of the property.
In addition to tax provisions that were made permanent, a number of them were extended. The new markets tax credit, the opportunity tax credit, bonus depreciation, and the controlled foreign corporations look-through rule were all extended through 2019.
Dozens of minor provisions, including several energy tax breaks, were extended through 2016.
Additionally, the bill seeks to make some reforms to the IRS that have been pushed by Republicans in the wake of the controversy surrounding the IRS’s targeting of conservative political groups.
The bill also includes a two-year delay in implementation of the medical device tax.
In the Senate, support for the tax measure is even more bipartisan than it is in the House. Senate Finance Committee ranking member Ron Wyden (D-OR) joined with the Republican chairmen of the House and Senate tax-writing committees in announcing the deal that finally passed in the House.
Several Democrats are worried that the tax bill will add to the deficit- the Joint Committee on Taxation (JCT) estimated that the tax bill will cost $622 billion over 10 years.