U.S. Federal Tax Notice

Via the RNG Coalition:

Congress Sends Tax Reform to the President for Signature

Both the U.S. House and Senate approved the conference report for H.R. 1, the Tax Cuts and Jobs Act, and have forwarded the measure to President Trump to sign into law.  
The tax reform bill approved by Congress makes a host of changes to the nation’s tax laws. Of note to renewable natural gas stakeholders:
  • The bill reduces the corporate tax rate from 35% to 21%, and provides a 20% deduction for qualifying pass-through business entities. The corporate rate reduction is permanent, and the 20% deduction for pass-through entities expires at the end of 2025.
  • Provides 100% expensing between now and 2022.  
  • The final version of H.R. 1 does not include a provision in the initial House-passed bill that would have made interest on private activity bonds taxable. The final bill does, however, make interest on advance refunding bonds taxable, and repeals a host of tax credit bonds.
  • Does not contain any provisions extending renewable energy tax incentives.  In addition, the bill does not contain provisions in the initial House bill eliminating the inflation update on the Section 45 renewable energy production tax credit (PTC) or modifying the beginning construction rules that apply to the PTC or the Section 48 renewable energy investment tax credit (ITC).
Passage of the tax reform package was a top priority for Republicans in Congress, and President Trump has signaled his intention to sign H.R. 1 into law.

Senator Hatch (R-UT) Unveils Tax Extender Legislation

Subsequent to passage of tax reform legislation, Senator Orrin Hatch (R-UT), the Chairman of the Senate Finance Committee, filed legislation to extend a host of tax provisions that expired at the end of 2016. 
Among other things, the bill would provide 2-year retroactive extensions for:
  • The credit for alternative fuel vehicle refueling property;
  • The 2nd generation biofuel producer credit;
  • The biodiesel and renewable diesel tax incentive;
  • The Section 45 production tax credit (PTC) for non-wind renewable energy technologies, including landfill gas; and 
  • Alternative fuel excise tax credits.
In addition, the bill unveiled by Senator Hatch would give non-solar renewable energy technologies that qualify for the Section 48 investment tax credit an extension and phase-down akin to that provided to solar technology in the 2015 tax extender package. The proposed measure would also modify the tax credit for advanced nuclear power facilities and provide a credit for carbon sequestration technology.
There are Senators advocating that this tax extender package be added to a continuing resolution (CR) Congress will consider this week to fund the federal government’s operations beyond December 22, but it is unclear at this point if tax extenders will be added to this CR. If not, Congress will have to revisit funding for the federal government and a host of other time sensitive issues in mid-January, which will provide another legislative vehicle for a tax extenders package.
Look for an update to this notice in our RNG News Brief later this week.