TAX EXTENDERS UPDATE – November 2019

Politico reported last week that the House Ways and Means Committee Democrats are likely to unveil a “green energy” incentives package in the coming days, possibly as soon as the week of November 18th. The package could be a discussion draft or a more formal legislative proposal, but either way it is likely to include expired and expiring tax breaks for renewable energy and energy efficiency, such as 179D and 45L.

The House Sustainable Energy and Environmental Coalition sent House Speaker Nancy Pelosi, D-Calif., and Majority Leader Steny Hoyer, D-Md., a letter signed by 166 House Democrats calling for the “inclusion of critical clean energy tax policies in negotiations around must-pass legislation this year.” Here is an important excerpt from the letter:

Energy Efficiency: We encourage an extension of the 179D deduction for energy efficient commercial and multifamily buildings. We also encourage extensions and updates for the 25C incentive for homeowner efficiency improvements and Section 45L incentive for energy efficient new homes that reflect new technologies and changed market conditions. Extending and modifying energy efficiency tax credits will help reduce greenhouse gas emissions, save customers and businesses money, and reduce dangerous air pollution.

The next opportunity for hitching a ride on “must pass legislation” would be on Senate spending bills passed in advance of the impending stopgap lapse on November 21, though another stopgap measure appears likely with the 12 spending bills still yet to reach conference. Senate Appropriations Committee Chairman Richard Shelby, R-Ala., would prefer a longer stopgap extension into February or March of next year. Speaker Pelosi and Senate Majority Leader Mitch McConnell, R-Ky., have reportedly agreed that their goal is to pass comprehensive spending bills for FY 2020 by December 31, leading to a shorter-term funding extension.

There are still a number of unknowns, but 179D and 45L have significant bipartisan support and could have a couple of extension opportunities before the end of 2019.

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BRAYN Consulting, LLC

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