Congress mulls reviving tax breaks prized by ADM, Tesla, GM
U.S. lawmakers led by Senate Finance Committee Chairman Charles Grassley are negotiating a potential revival of expired tax breaks in last-minute negotiations over a government spending bill.
The talks, which were held on Saturday, are focused on reinstating the so-called tax extenders, a move that could be a boon to the biofuel, alcoholic beverage and short-line railroad industries that were hoping to see renewal of valuable credits and deductions, according to a person familiar with the discussions.
“Chairman Grassley has been leading bicameral negotiations on tax extenders and is working to make sure they are included in the year-end appropriations package,” Michael Zona, a spokesman for Grassley, said Saturday in an email. “Dropping tax extenders like biodiesel would be a major setback and may push more plants that employ thousands of Americans toward bankruptcy.”
The negotiations are taking place as the House and Senate seek to strike a deal that would fund the government before the current stopgap package expires on Friday. The tax breaks lapsed at the end of 2017. Since then, businesses have been expecting Congress to retroactively extend the benefits as lawmakers have repeatedly done in years past. So far, no relief has materialized.
The talks present a particularly acute boost to the biodiesel sector — including Archer-Daniels-Midland Co. and Renewable Energy Group Inc. — which is advocating for a retroactive extension of a $1 per gallon tax credit for biodiesel. Several plants have begun slashing production and laying off workers as a result of the two-year lapse of the tax credit.
It also could buoy tax breaks for those thinking of buying electric cars from General Motors Co. and Tesla Inc., which had been lobbying for an extension of a lucrative consumer tax credit for electric vehicle purchases. The $7,500 credit is still in effect, but Congress has capped the number of credits at 200,000 for each manufacturer. Both GM and Tesla have already reached the threshold.
Beer, wine and spirits producers could also see their two-year tax break revived. The 2017 tax overhaul temporarily lowered the excise tax for brewers, wine makers and distillers. The provision, which has strong bipartisan support, is credited with helping the craft beverage industry expand.
Others hoping to use the year-end spending bill as a vehicle for their tax credit includes the solar industry, which is preparing to see its 30 percent investment tax credit start decreasing next year.
— With assistance from Kaustuv Basu