Senate committee reports on future of tax extenders

The leaders of the Senate Finance Committee issued three summary reports from their internal task forces examining what to do about the perennial problem of temporary tax breaks that need to be extended every few years.

Even though the PATH Act of 2015 and the Tax Cuts and Jobs Act of 2017 were supposed to make many of the temporary features of the Tax Code more permanent, there are still more than 40 temporary tax provisions that either expired or are scheduled to expire between Dec. 31, 2017 and Dec. 31, 2019. After the fight over the 2017 tax overhaul, Republicans and Democrats in Congress have been unable to agree about what to do about them.

As a way of resolving the impasse, the leaders of the Senate Finance Committee, Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Oregon, set up five bipartisan task forces in May made up of senators on the committee who would study the various issues associated with five broad areas of tax breaks: workforce and community development; health; energy; business cost recovery; and a combined group consisting of individual, excise and other temporary policies (see Senate Finance Committee sets up task forces to deal with tax extenders).

On Wednesday, three of the task forces issued their respective reports on energy; business cost recovery; and individual, excise and other expiring policies. The reports include feedback from various groups and individuals affected by the temporary tax policies. The remaining task force summary reports are expected to be finalized in the near future and will be released as they are received. A separate, sixth task force is examining whether there is a core package of tax relief provisions that should be available when natural disasters strike.

“I’m grateful for the hard work of my colleagues and for the input we received from individuals, businesses and industries across the country that represent millions of American jobs,” Grassley said in a statement Wednesday. “Their thorough and bipartisan approach will form the foundation of the committee’s work to provide more certainty to temporary tax policy.”

He added that the next step will be to put together a legislative package based on the proposals that the task forces received, the areas of consensus among the members and continued bipartisan discussions.

“Taxpayers deserve predictability and clarity, and they haven’t received either for far too long on temporary tax policy,” said Grassley. “As we work toward that goal, we also shouldn’t lose sight of the provisions that expired more than a year and a half ago. That must be a top priority for Congress upon its return in September.”

His Democratic counterpart agreed that there needs to be more certainty. “Tax policy should not be set a year or two at a time. We need to find permanent solutions that provide certainty to families and businesses,” Wyden stated. “I appreciate the work of my colleagues and their staff to meet with a wide range of stakeholders over the past several months and explore options for addressing these policy issues.”

In February, Grassley and Wyden teamed up to introduce bipartisan legislation to restore the tax provisions that expired at the end of 2017 and 2018 through the balance of this year and provide disaster tax relief benefits to individuals and businesses affected by major disasters occurring in 2018 (see Senators introduce retroactive tax extenders and disaster tax relief bill). However, they acknowledged that the House is required under the Constitution to initiate all tax legislation.

The energy task force summary report is here. The cost recovery task force summary report is here. The individual, excise & other expiring policies task force summary report is here. Further information about the temporary tax policies that the task forces examined can be found here.