(Bloomberg) Makers of propane and hard cider are among the likely winners as the U.S. Senate Finance Committee prepares to vote this week on a package of tax breaks.
The committee Monday announced that it will consider 17 bills on Wednesday, and the variety in the measures is a reminder of how the U.S. tax code reaches into every corner of the economy.
Potential winners also may include military spouses, real estate investment trusts, tax delinquents hospitalized in combat zones and companies planning to convert waste heat into power.
The propane measure would lower the excise tax on propane so that it’s no longer taxed at the same rate as more energy-dense gasoline. The propane tax rate would decline to 13.2 cents per gallon from 18.3 cents.
Similarly, the tax rate on liquefied natural gas would be decoupled from the tax on diesel fuel and would decline to 14.1 cents from 24.3 cents.
“This has been a long-time priority for us,” said Jeff Petrash, general counsel of the National Propane Gas Association, whose board of directors includes executives from AmeriGas Partners LP and North Star Energy LLC.
Bipartisan Backing
That bill would cost the government $54 million over a decade in forgone revenue, according to the congressional Joint Committee on Taxation. It’s backed by Democrats Michael Bennet of Colorado and Ben Cardin of Maryland, along with Republicans Richard Burr of North Carolina, John Thune of South Dakota and Pat Roberts of Kansas, according to the Finance Committee.
Cider makers would benefit from an expansion of the definition of hard cider, which is taxed more lightly than wine or champagne. Under the proposal, cider could contain as much as 8.5 percent alcohol, up from 7 percent under current law.
Cider produced from pears—not just apples—would become eligible for the cider tax rate under the proposal, which is supported by Senator Charles Schumer, a New York Democrat.
Companies that have reported lobbying on cider taxation in recent years include Anheuser-Busch InBev NV, Boston Beer Co. and Vermont Hard Cider Co., the maker of Woodchuck Hard Cider. The cider tax measure would cost the government an estimated $12 million over a decade.
“This is an opportunity for the committee to clear the deck and advance common-sense tax bills that have garnered strong bipartisan support within the Congress,” Senate Finance Chairman Orrin Hatch, a Utah Republican, said in a statement.
